Leave Big Business Out of Coronavirus Small Business Loans

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Dear Members of Congress:

All Americans are being hit hard by the economic consequence of our collective efforts to stop the spread of the Coronavirus (SARS-CoV-2) pandemic.  We are mostly all under shelter-in-place orders and are avoiding, if we can, coming within close proximity of others beyond our immediate families.  As a result, the economy has largely stopped and non-essential businesses have mostly closed, putting their employees at risk of losing their jobs, their homes and their futures.  Of these shuttered businesses, it is the small businesses and their employees that will likely suffer the most since they generally have smaller cash reserves and are less able to carry the costs of underutilized employees for very long. 

Accordingly, we were relieved to learn that the $2.2 trillion of aid included in the Coronavirus Aid, Relief and Economic Security Act (CARES Act), enacted on March 30, 2020, included the Paycheck Protection Program (PPP), which made $349 million in forgivable loans available to small businesses to pay their employees and overhead as they struggle with social distancing and stay at home orders.  Helping those most in need is the right thing to do.  

The reality of the CARES act turned out to be less helpful for small business owners than originally intended. Big business, with the help of their high paid lobbyists, was able to get exceptions to the “small business” language included in the CARES Act that gave large, publicly traded companies access to the funds originally intended for small businesses, as long as they did not have more than 500 employees per location.  Hotel chains have to make one application per property. 

Many small business owners who attempted to apply for the Paycheck Protection Program were told they could not get loans from big banks because they did not have existing business loan relationships. Meanwhile, the well-connected Big Businesses were able to sweep in and deplete the $349 million pool of money which was intended for small businesses.  For example,

  • The parent company of Ruth's Chris Steakhouse, a publicly-traded company with over $40 million in profits last year, used two different companies to apply for funds and received $20 million from the Paycheck Protection Program earmarked for small business; (1)
  • Dave & Buster’s Entertainment, earning over $1.27 billion in revenue last year, has applied for $10 million from the Paycheck Protection Program funding for small business; (2)
  • Potbelly Corporation, publicly traded company, got a $10 million loan from the Paycheck Protection Program funding for small business; (3)

While most actual small business owners were stuck in red tape or patiently waiting in line, these big corporations with existing banking relationships were draining the funds from the PPP pool.  Now, at least in part as a result of these and other big businesses, the Paycheck Protection Program funding for small business is exhausted, and the intended recipients of this aid package and their employees are left with only the hope that they will receive help in the next aide package that comes through. 

While we understand that big businesses are suffering financial hardships too, Corporate America generally has a different bundle of resources at its disposal, including financial reserves and the ability to take out favorable loans.  Small business owners oftentimes are self funded and have nothing more to fall back on than the equity in their homes.  This program was meant to help the struggling small business owners, not be a financial windfall for a company with $41 million in profits last year.

Using some very simple math, if you only took the $30 million in loans to Ruth's Chris and Potbelly Corporation, 2400 small business owners could be breathing a sigh of relief knowing they had a safety net. ($5,000 expenses x 2.5 months = $12,500),

We request that you use your elected office to do the right thing and help our small business owners.  Enact clarifying legislation or regulations that close the loopholes that allowed big business to take benefits intended for small businesses.  

There are actual, real people running small business out here that do not have the luxury of hiring high priced lobbyists, are not able to make their payrolls, and that were counting on this program to help them as intended.  Do the right thing, help those that need help the most instead of giving more to those that have the most.

We are in a unique time in our lives, put aside partisan politics and do what is right for our country.  The people you represent will thank you for it, and it is the right thing to do. 


Your Constituents



1.  Wall Street Journal: Ruth’s Chris Steak House Gets $20 Million From Coronavirus Aid Program,  Orlando Sentinel: Large hotel, restaurant companies getting small-business loans want to spend less of the money paying workers  and NYPost: Big restaurant chains take $30M in coronavirus loans meant for small businesses

2.  Orlando Sentinel: Large hotel, restaurant companies getting small-business loans want to spend less of the money paying workers

3.  NYPost: Big restaurant chains take $30M in coronavirus loans meant for small businesses

Additional sources:

Forbes: The Paycheck Protection Program Has Been A Disaster For Small Business

NY Times: Frenzy and Desperation as Small Businesses Grab for Government Aid

NY Times: Small-Business Aid Funds Run Dry as Program Fails to Reach Hardest Hit

Vox: The Paycheck Protection Program has already run out of money

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