Today many businesses are seeking financial assistance due to COVID-19, and as such, these businesses are applying for all the loans and grants that are available and those for which they qualify. Shake Shack is one business, which received ten million dollars from the Payroll Protection Program, or PPP. The PPP is a loan for businesses with no more than five hundred employees. Shake Shack qualified for the PPP because even though it is a chain restaurant with thousands of workers within the United States, each Shake Shack branch employs less than five hundred workers.
The goal of the PPP is for employers to retain their current employees and pay them during the COVID-19 shutdown if they receive the PPP loan. Once the application process opened up for the PPP loan, the money was quickly disbursed. Shake Shack received the money from the PPP loan, but instead of keeping all of its employees it laid off or furloughed many of its employees. When one is laid off from the job, this is usually permanent, whereas when one is furloughed, this is temporary. Shake Shack will return the ten million dollars it received, and maybe this money can go into the pot and be given to other businesses that have applied for the PPP loan.
Many businesses are applying for the PPP loan because they can take out 2.5 times its average monthly payroll costs. The term of the loan is two years, and the interest is 1%, and all payments are deferred for six months. Also, the loan can be forgiven, but the business must apply for the loan to be forgiven and submit documentation for what the money was used for, like payroll, utilities, rent, etc. The whole PPP loan will not be forgiven if the business has fewer employees or a decrease in salary by more than 25%.
If you have any questions regarding the PPP loan, then you can contact Jayson Lutzky. Jayson Lutzky gives free consultations and can be reached at 718-329-9500. He has been practicing law for over 36 years in the Bronx, and he can help you with your legal matter. Due to COVID-19, he is available by telephone or by Zoom Monday to Friday from 9am to 4pm. Regular business hours are Monday to Friday from 9am to 5pm, with the last appointment at 4pm, and Saturday from 10am to 2pm, with the last appointment at 1pm.