After snapping up
$15 million in federal loans intended to help small employers, the parent company of San Antonio-born Taco Cabana now says it's returning the money.
In a securities filing
, Dallas-based Fiesta Restaurant Group said it's repaying $15 million in low-interest loans provided by JPMorgan Chase Bank. The $661 million restaurant group borrowed the funds through the federal Paycheck Protection Program (PPP), established to help small businesses retain workers during the coronavirus pandemic.
Fiesta, which also owns Florida's Pollo Tropical chain, issued a separate filing
last week saying it was considering returning the money "in light of the recent guidance" from the U.S. Treasury Department and Small Business Administration.
The guidance in question
says companies borrowing through the PPP must show the loans are necessary and that they can't access other funding sources. That clarification seems to rule out publicly traded companies such as Fiesta, since they can raise money by issuing stocks and bonds.
In last week's regulatory filing, Fiesta revealed that it hadn't just obtained a previously reported $10 million loan for Taco Cabana but also $5 million in additional cash for Pollo Tropical.
Major restaurant chains including Fiesta, Shake Shack and Ruth's Chris Steakhouse came under fire earlier this month after the Associated Press revealed
they had tapped into the small business program relief program. Many small employers complained that PPP funds were depleted before they could apply, although another round opened this week
After the flurry of bad publicity, Steak Shack announced plans to return $10 million in PPP borrowings. Ruth's Chris said it will return $20 million in loans. Fiesta has now joined the club.
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