Ruth’s Hospitality Group, which owns and operates more than 100 of the steakhouses across the United States, Canada and Mexico, got two $10 million loans, one for each of its subsidiaries despite being a multimillion-dollar corporation.
The company’s announcement came at about the same time Thursday that the Small Business Administration issued a warning to big-chain companies to prove they were indeed eligible to receive the funds in the first place or repay millions to the government by May 7.
Research by the Brookings Institution, a liberal-leaning think tank, suggests the PPP favored larger, and mostly white-owned, small businesses, even as the value of the loans being sought by minority and women-owned businesses would have been smaller than their counterparts, CBS reported.
“In order to achieve scale and rapidity, they did it through lenders, and lenders rationally said, ‘We’ll start with our existing customers first because we have all of their info,’ and those tended to be larger small businesses,” said Joseph Parilla, fellow at the Metropolitan Policy Program at Brookings. “It stands to reason that the way the PPP was structured, approved loans tended to skew toward white-owned small businesses.”
“Based on how the program is structured, we estimate that upward of 90% of businesses owned by people of color have been, or will likely be, shut out of the Paycheck Protection Program,” said Ashley Harrington, director of federal advocacy and senior counsel for the Center for Responsible Lending, a non-profit group that combats abusive lending practices and recently examined the loan program's parameters, according to CBS.
“[If] participating banks are requiring that applicants have a credit relationship — to already have some type of loan out — that already cuts many of these businesses out,” Harrington said.
Last week, Congress replenished the fund with an additional $310 billion in forgivable PPP business loans, which President Donald Trump immediately signed into law.
The new round of funding went into effect Monday and is projected to only last four to six days.
A huge backlog in applications was already being reported Monday along with technical difficulties on the website where companies submit applications. An estimated 1 million applications were already in line for the new emergency funding. About 1.66 million applications were approved in the first round.