Ruth’s Chris owner to speed up repayment of $ 20 million federal bailout loan
NEW YORK (Reuters) – Ruth’s Hospitality Group Inc, owner of restaurant chain Ruth’s Chris Steak House, said on Thursday it would quickly repay $ 20 million in federal bailout loans it received to help maintain the mass pay during the coronavirus crisis, a program aimed at small businesses.
The announcement came after the U.S. Treasury said a high-value public company would struggle to secure a coronavirus relief loan in the next round of funding.
It also came after public pressure, with an online petition collecting more than 260,000 signatures, asking Ruth to return the money.
Ruth’s decision on Thursday was first reported by The Wall Street Journal.
A spokesperson did not respond to requests for more details on when the loan will now be repaid and whether the company would be able to continue paying for health care and wages or would need to seek a additional funding to do so.
There has been widespread concern that large companies have taken out the loans even though they have other means of financing not available to mom and pop stores, many of whom have received nothing from the program.
“You’re going to kill your brand,” famed entrepreneur Mark Cuban told CNBC of the publicly traded companies that applied for loans from the Federal Paycheck Protection Program on Monday.
Shake Shack Burger Chain SHAK.N earlier this week, it became the first public company to announce that it will repay the funds now, rather than repay the loan over time.
Instead, the New York-based company, valued at over $ 1.6 billion, was able to raise $ 150 million in equity.
Like other state-owned enterprises, Ruth qualified for PPP financing.
“Our goal was to use funds to keep as many of our team members on the job for as long as possible, cover 100% of health care benefits and position Ruth’s Chris to rebuild their workforce as quickly as possible,” said the company in a press release obtained. by Reuters.
He intended to repay the loan according to government guidelines, but decided to expedite repayment “as we learn more about the program’s funding limits and unintended impact.”
“We remain committed to protecting our hard-working team,” the statement said. “We hope that these funds will be loaned to another company to protect their employees, as we had planned.”
Reporting by Hilary Russ; Editing by Sandra Maler and Diane Craft