When Ruth Fertel mortgaged her house so she could buy a single steak restaurant in her Louisiana hometown in 1965, her friends and family thought she was off her rocker.
But Chris Steak House was a popular eatery near the New Orleans Fairgrounds, and Ruth knew she could make it even better. And she did.
That is until fire struck in 1976, destroying the restaurant. Luckily, Ruth’s success had allowed her to secure another location quickly, but her agreement to buy the restaurant only allowed her to use “Chris Steak House” at its original location.
Ruth’s solution? She renamed it Ruth’s Chris Steak House — not exactly a name that rolls off the tongue, but one well associated with class and high quality. Anyone who has visited the restaurant’s Midtown location near Radio City Music Hall could attest to it.
And yes, like tens of thousands of businesses in the country, Ruth’s Chris is suffering significantly during the coronavirus pandemic. It deserves help, just like every other restaurant and store that is the lifeblood of our communities — but not at the expense of those businesses.
Congress, with the support of President Trump, created a program last month known as the Paycheck Protection Program. It was $349 billion in low-interest small business loans intended to not only help keep our shops and restaurants solvent, but also to ensure its employees were still receiving a paycheck in the midst of a crisis. While $349 billion might sound like a lot, it is believed our country has 30.2 million small businesses, meaning if every one got an equal cut of that pie, each would receive about $11,500 each.
But there was nowhere near enough to go around. The funds were depleted within two weeks, with thousands upon thousands of small businesses left out in the cold.
Ruth’s Chris, however, wasn’t one of them. The restaurant chain — which has earned $114 million in profit over the last three years on revenue of nearly $1.3 billion — was awarded loans through PPP of $20 million. That would give each of its 5,700 employees about $3,500 each.
Granted, Ruth’s Chris only has $5 million of cash in the bank, according to its corporate record filings, but that’s $5 million more than most small businesses have to spare while trying to find ways to keep their employees paid.
Ruth’s Chris isn’t alone. A number of larger chains won awards through the program, including a reported $10 million for Shake Shack — a company that boasts cash and other quick-sell assets of more than $100 million on-hand.
We would never suggest any business in need should be excluded from government help. But this is small business help, and if a company that has more than a billion dollars in revenue or one that has $100 million in the bank is considered small, we’d hate to see what’s required to be a large company.
We hope by the time you read these words, Congress has more funds ready to roll out to help businesses. But if and when that does happen, “small business” must be redefined.
Most larger companies have humble roots, like Ruth Fertel mortgaging her modest home. But unless that company is still small like that today, it needs to wait its turn. Small businesses must come first.