Shocker! Ruth Chris Steakhouse, which made 468 million year and 40 million profit, got 20 million in SBA loans

entremet · Apr 17, 2020

This is absolute bullshit, but par for the course for America crony capitalism. Many small businesses still haven't received their funds.

Ruth’s Chris Steak House Gets $20 Million From Coronavirus Aid Program

The high-end dining chain is among the first public companies to disclose it has received a government-backed loan to support payroll, days after the $350 billion program to aid small businesses started taking applications.

www.wsj.com

Paywalled, but the meat is below.

The owner of the high-end Ruth's Chris Steak House chain is among the first public companies to disclose it has received a government-backed loan to keep people on its payroll.

Ruth's Hospitality Group Inc., a company with more than 5,000 workers, received $20 million in forgivable loans on April 7, according to a securities filing. That is four days after the Small Business Administration opened the application window on its $350 billion Payroll Protection Program.

Many small-business owners are still waiting for their banks to process an application or hear back about whether they qualify or will receive financial assistance from the PPP fund. The SBA says 1.1 million applications have been approved for loans worth $263 billion as of Tuesday afternoon. The average loan size is about $239,000 so far, the SBA says. Banks say only small portions of approved loans have been disbursed to businesses.

Here's the kicker:

The loans were intended for businesses with fewer than 500 employees, but language in the $2 trillion stimulus bill allows restaurants and hotel chains to participate regardless of how many people they employ.

Couleurs · Apr 17, 2020

Turns out SBA really stood for Steak Business Administration

shadowsdarknes · Apr 17, 2020

I thought the PPP was for <500 employees?

thesoapster · Apr 17, 2020

Meanwhile no actual small businesses in my town are getting shit.

entremet · Apr 17, 2020

shadowsdarknes said:
I thought the PPP was for <500 employees?

Updated with the kicker.

ianpm31 · Apr 17, 2020

Ruth Steakhouse advertises on the Hannity radio show. I know because my dad and I would listen from time to time for comedic reasons.

lt519 · Apr 17, 2020

What are the conditions on these loans for forgiveness? Just curious, would help me decide if I'm slightly outraged or really outraged.

exodus · Apr 17, 2020

Obviously hotel chains are exempt from the restrictions. The level of corruption in the US government is absolutely ridiculous.

prophetvx · Apr 17, 2020

thesoapster said:
Meanwhile no actual small businesses in my town are getting shit.

It's almost like relying on the banks to execute it was a terrible idea.

Wells Fargo tells business clients to consider other banks for emergency loans

Just days after the Fed lifted Wells Fargo's asset cap so it could make more Paycheck Protection Program loans, it warned customers its queue is long and they may want to go elsewhere before program funds are exhausted.

www.americanbanker.com

entremet · Apr 17, 2020

lt519 said:
What are the conditions on these loans for forgiveness? Just curious, would help me decide if I'm slightly outraged or really outraged.

Well, the big issue is that these huge corporations, that can leverage their assets, or use other funding, are taking from a fund small meant for small businesses

It's fundamentally unfair.

Mark · Apr 17, 2020

I posted a thread about this (https://www.resetera.com/threads/my...dying-due-to-the-pandemic-and-it-really-sucks) but my girlfriend's small business hasn't heard anything yet from her bank on loans and they are on the brink. She created a new website which has gotten them a few sales but not nearly enough to keep afloat. She really needs these loans and its disgusting that a company as large as Ruth Chris can get help way before her business.

prophetvx · Apr 17, 2020

lt519 said:
What are the conditions on these loans for forgiveness? Just curious, would help me decide if I'm slightly outraged or really outraged.

Maintain your payroll until I believe it was the end of July. Prove that the loan went to payroll or OPEX like rent.

lt519 · Apr 17, 2020

entremet said:
Well, the big issue is that these huge corporations, that can leverage their assets, or use other funding, are taking from small businesses.

It's fundamentally unfair.

Hence the slightly outraged or really outraged. Either way I agree it's really dumb; just want to be informed of the conditions these loans are given out in.

prophetvx said:
Maintain your payroll until I believe it was the end of July. Prove that the loan went to payroll or OPEX like rent.

Thank you, if it keeps people employed, directly or in-directly to Ruth's, that would have other-wised been furloughed or out of work I'm only slightly outraged.

Wilsongt · Apr 17, 2020

The grift is strong in America and to think $1mil of that could have saved a small business from going bankrupt.

Hiphopopotamus · Apr 17, 2020

There is a club; you're not in the club

Bonafide · Apr 17, 2020

Don't see what makes this "crony capitalism".

This is the natural course of the system.

prophetvx · Apr 17, 2020

Hiphopopotamus said:
There is a club; you're not in the club

Those percentages would likely line up with actual small businesses.

I'm sure there would have been a lot more larger businesses in California trying to exploit it over Ohio.

Walter White Walker · Apr 17, 2020

Meanwhile all I got was silence back after applying.

entremet · Apr 17, 2020

]

Hiphopopotamus said:
There is a club; you're not in the club

The same thing happened with the relief funds in general. Less populous states got way more funding, even proportionally.

Pai Pai Master · Apr 17, 2020

Vultures

entremet · Apr 17, 2020

lt519 said:
Hence the slightly outraged or really outraged. Either way I agree it's really dumb; just want to be informed of the conditions these loans are given out in.

Thank you, if it keeps people employed, directly or in-directly to Ruth's, that would have other-wised been furloughed or out of work I'm only slightly outraged.

Ruth will survive regardless. Many small businesses will be forced to die.

If your argument is more stimulus, I have no issues.

SpottieO · Apr 17, 2020

Hiphopopotamus said:
There is a club; you're not in the club

I think this a highly misleading chart FYI

Hiphopopotamus · Apr 17, 2020

prophetvx said:
Those percentages would likely line up with actual small businesses.

I'm sure there would have been a lot more larger businesses in California trying to exploit it over Ohio.

The kicker here is many of the states with the most approved loans have little to no stay at home orders. Why did each of the Dakotas get the same amount of loans as tourist-dependent Nevada?

Oklahoma has no stay at home order but they're a top 10 recipient

Deleted member 8722 · Apr 17, 2020

That's ridiculous. I'm not looking forward to talking with all our applicant's who's loan applications didn't even get looked at. Yesterday was rough and today will be even nuttier.

thewienke · Apr 17, 2020

prophetvx said:
Those percentages would likely line up with actual small businesses.

I'm sure there would have been a lot more larger businesses in California trying to exploit it over Ohio.

Not just that but the sheer volume of businesses requesting assistance.

24% in California is probably a whole lot more than 71% in North Dakota. So is it a bureaucracy limitation issue? How many businesses in each state requested loans? Was it a case where if they did 100% of California then there wouldn't be any money left for other states?

Hiphopopotamus said:
The numbers are in the Forbes chart in that Twitter link

Of course I just checked the twitter comments instead of clicking through.

Yeah 54,000 for California and 18,000 for Nebraska is definitely fishy.

Hiphopopotamus · Apr 17, 2020

thewienke said:
Not just that but the sheer volume of businesses requesting assistance.

24% in California is probably a whole lot more than 71% in North Dakota. So is it a bureaucracy limitation issue? How many businesses in each state requested loans?

The numbers are in the Forbes chart in that Twitter link

Doggg · Apr 17, 2020

In times like these we desperately need our overpriced steak houses.

prophetvx · Apr 17, 2020

Hiphopopotamus said:
The kicker here is many of the states with the most approved loans have little to no stay at home orders. Why did the each of the Dakotas get the same amount of loans as tourist-dependent Nevada?

Oklahoma has no stay at home order but they're a top 10 recipient

Oh I'm not defending it, I'm just saying the numbers are a little understandable. As a portion of the of the economy, SMB's would dominate everywhere but the coastal states, those numbers seem to reflect that.

Possum Armada · Apr 17, 2020

Again, this is literally how corporations are required to operate. Their entire legal existence is designed to maximize profitability for shareholders. Nothing else.

Expecting a corporation to be anything other than greedy is like getting mad at your light switch for not making you an omelette in the morning.

The system itself is fundamentally evil and needs to be destroyed and rebuilt to be more equitable and fair.

bionic77 · Apr 17, 2020

Hiphopopotamus said:
There is a club; you're not in the club

If Trump is trying to buy votes he is doing a really bad job by giving money to the states he is going to win.

Florida and Pennsylvania were both less than 50%.

Dark1x · Apr 17, 2020

That name still throws me for a loop. It messes with logic.

"Ruth's Chris Steak House" - it's a Chris Steak House owned by Ruth? Is Chris the son of Ruth and this is Chris's Steak House?

entremet · Apr 17, 2020

Blue Skied And Clear said:
Again, this is literally how corporations are required to operate. Their entire legal existence is designed to maximize profitability for shareholders. Nothing else.

Expecting a corporation to be anything other than greedy is like getting mad at your light switch for not making you an omelette in the morning.

The system itself is fundamentally evil and needs to be destroyed and rebuilt to be more equitable and fair.

I'm not blaming Ruth Chris. I'm blaming our government for allowing these loopholes.

If they wanted to create a separate fund for big boy companies, I'd have no issues.

But they created this fund for small business, they put a big exception for huge companies. So of course, a good amount of the funds would go to these companies. They have way more resources and staff to handle these applications much more swiftly, on top of political connections.

Compare that to a 4 person business that has an owner that is completely overwhelmed and trying to keep their business afloat.

PanzerKraken · Apr 17, 2020

And they are such a shitty steak house chain, overpriced "luxury" chain

Deleted member 12224 · Apr 17, 2020

Ruth's Chris is that large of a company?

My fellow Americans have terrible fucking taste.

Hiphopopotamus · Apr 17, 2020

bionic77 said:
If Trump is trying to buy votes he is doing a really bad job by giving money to the states he is going to win.

Florida and Pennsylvania were both less than 50%.

I don't think it's vote buying, I think it's lobbyist groups that have FEMA contacts that pushed their clients' interests to the front of the line knowing the fund would be depleted almost immediately.

nihilence · Apr 17, 2020

If there is a loophole for restaurants or hospitality, I wonder how much the Trump resorts have received.

entremet · Apr 17, 2020

cagey said:
Ruth's Chris is that large of a company?

My fellow Americans have terrible fucking taste.

They're a restaurant group, so they own other chains too.

Hiphopopotamus · Apr 17, 2020

Look at SBA rules for the fund. If you're a franchise you're considered Small-Medium if you have less than 500 employees and $15 mil profits PER LOCATION.

It's a joke

Dali · Apr 17, 2020

exodus said:
Obviously hotel chains are exempt from the restrictions. The level of corruption in the US government is absolutely ridiculous.

But who would stand to gain from that exemption? Who? A mystery only Data on the holodeck playing Sherlock Holmes could solve.

manzoman96 · Apr 17, 2020

Dark1x said:
That name still throws me for a loop. It messes with logic.

"Ruth's Chris Steak House" - it's a Chris Steak House owned by Ruth? Is Chris the son of Ruth and this is Chris's Steak House?

One of life's many mysteries.

Polk · Apr 17, 2020

How they got around maximum loan of 10M though?

Bear · Apr 17, 2020

I can't really blame them for taking advantage of a loophole to pay employees. I can blame the administration for writing such broad terms and not funding it correctly.

Cotton McKnight · Apr 17, 2020

thesoapster said:
Meanwhile no actual small businesses in my town are getting shit.

No small businesses are getting anything anywhere...Sad but true, we the people got fleeced again.

nihilence said:
If there is a loophole for restaurants or hospitality, I wonder how much the Trump resorts have received.

How many different resorts/restaurants are in the Trump holdings? Let's not do the math, it's safer to assume they all got the maximum amount of money.

Lobster Roll · Apr 17, 2020

Dark1x said:
That name still throws me for a loop. It messes with logic.

"Ruth's Chris Steak House" - it's a Chris Steak House owned by Ruth? Is Chris the son of Ruth and this is Chris's Steak House?

Maybe there were two people named Chris growing up very close to one another, and to differentiate them, one of them was just called "Ruth's Chris" so people know who they were talking about.

Weeats · Apr 17, 2020

prophetvx said:
Those percentages would likely line up with actual small businesses.

I'm sure there would have been a lot more larger businesses in California trying to exploit it over Ohio.

That is a laughable understanding of math and statistics, dude.

SteveWinwood · Apr 17, 2020

Dark1x said:
That name still throws me for a loop. It messes with logic.

"Ruth's Chris Steak House" - it's a Chris Steak House owned by Ruth? Is Chris the son of Ruth and this is Chris's Steak House?

Maybe Chris steak is a cut of meat I'm unfamiliar with.

swoon · Apr 17, 2020

Dark1x said:
That name still throws me for a loop. It messes with logic.

"Ruth's Chris Steak House" - it's a Chris Steak House owned by Ruth? Is Chris the son of Ruth and this is Chris's Steak House?

Ruth bought Chris Steak House is actually the origin of the name

Violence Jack · Apr 17, 2020

Overpriced garbage steak place gets bailed out while my locally owned steakhouse (which serves much better Prime Rib and steak for way cheaper) is in financial trouble.

thewienke · Apr 17, 2020

Hiphopopotamus said:
Look at SBA rules for the fund. If you're a franchise you're considered Small-Medium if you have less than 500 employees and $15 mil profits PER LOCATION.

It's a joke

The whole thing is kind of weird to me.

I'm mostly used to seeing these kinds of requests for the SBA:

Types of 7(a) loans | U.S. Small Business Administration

www.sba.gov

7a loans go up to like $5 million dollars (which is a silly amount of money for most mom and pop type businesses) and they'll often deny it if you can get traditional financing instead.

If these loans were going to the franchisees directly then that would make way more sense since that's fairly common with the SBA. However, the article suggests it's the parent company getting the loan.

Hiphopopotamus · Apr 17, 2020

Polk said:
How they got around maximum loan of 10M though?

If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis

If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply

Coronavirus Emergency Loans Guide and Checklist for Small Businesses and Nonprofits

The CARES Act allocated $350 billion to help small businesses and nonprofits keep workers employed amid the pandemic and economic downturn. The administration soon will release more details including the list of lenders offering loans under the program. In the meantime, the U.S. Chamber of...

www.uschamberfoundation.org

Shocker! Ruth Chris Steakhouse, which made 468 million year and 40 million profit, got 20 million in SBA loans

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