Chicago City Wire

After Shake Shack called it out for receiving a $10 million federal rescue loan, the Chicago-based sandwich chain Potbelly announced it, too, would return the funds from the Paycheck Protection Program.

Large companies that received PPP money were caught up in controversy when small businesses shut out of the first round of PPP funding began criticizing them. Shake Shack was under fire for receiving its own $10 million PPP loan. The company told NPR that its 189 restaurants individually employed an average of 45 employees, well below the 500 threshold. But the total number of employees at the corporation was nearly 8,000.

“Potbelly’s sales dropped dramatically when COVID-19 hit, forcing us to furlough employees, close shops, and significantly cut salaries at all levels of the organization,” the company told Crain’s Chicago Business.

To support its employees, Potbelly applied for PPP assistance and qualified. After complaints and clarification from the U.S. Treasury Department, Potbelly decided to return the money.

“We will continue to seek alternatives to help support our employees and enable them to return to work so they can serve our loyal customers,” the company told Crain’s Chicago Business.

Treasury Secretary Steven Mnuchin urged corporations to return the funds, and Illinois Gov. J.B. Pritzker said in a recent COVID-19 briefing that companies that don’t need the money shouldn’t accept it.

"It's true that the federal PPP program has been very difficult for small businesses to access,” Mnuchin told Crain’s Chicago Business. “Frankly, I'm very concerned about that.”

Pritzker said the $90 million that Illinois made available for grants to small businesses was not enough.

“There's no way that the state can do what the federal government can do," he told Crain’s Chicago Business. "I'm going to be talking to our legislature about implementing a program that will support small businesses, but I also think the federal government needs to step up to the plate."