Are coronavirus Small Business Administration loans available for businesses like McDonald's?
McDonald's surpassed $100 billion in annual sales last year
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A small business assistance program that's part of the coronavirus relief package Congress passed last month doesn't exclude chains like McDonald's because of a provision that offers loans to hotels and restaurants owned by big brands.
The Paycheck Protection Program is designed to get cash in the hands of struggling small businesses and incentivize them to keep staff on payroll, or re-hire workers who have already been laid off. Businesses with fewer than 500 employees are eligible for forgivable loans under the program.
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McDonald's locations are either corporate-owned or franchises, and it appears either kind of McDonald's restaurant could apply for PPP loans because the brand is in the Small Business Administration's Franchise Directory.
That poses an interesting situation in which a corporate McDonald's location could apply for the loan, although the company does not plan to make such a move. After all, McDonald's surpassed $100 billion in annual sales for the first time in 2019.
Jovita Carranza, administrator of the Small Business Administration, speaks at the White House April 2. (AP Photo/Alex Brandon)
"We don't think it's the right thing to do right now," David Tovar, McDonald's vice president of U.S. communications, told The Wall Street Journal. "We feel like we are in a good financial position right now."
Businesses of all sizes are competing for up to $350 billion in government-guaranteed loans through the program.
"Every day that goes by, more people are losing jobs and businesses are having to make difficult decisions," Matt Haller, a senior vice president at the International Franchise Association, told FOX Business.
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He said there's confusion for brands like 7-Eleven and Chick-fil-A that use a franchise model but aren't registered in the Franchise Directory.
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"We’re hopeful the administration will issue guidance that allows those brands to get on those registries in an expedited fashion," Haller said. "If you look on the borrower application form, there's a checkbox for is your franchise listed on the SBA franchise registry. And there are several thousand brands on this registry with notable exceptions."
FOX Business' inquiry to McDonald's was not returned at the time of publication.