As Companies Scramble to Return PPP, Why Allbirds Made the Decision Two Weeks Ago
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Allbirds has returned the loan it received from the government amid the coronavirus pandemic.
Two weeks ago, the digitally native brand wrote a post explaining its decision to give back the funds it collected as part of the Small Business Administration’s Paycheck Protection Program. It said that it had applied for the loan three weeks after the country entered widespread lockdowns and qualified for the program due to its status as a small business, with 339 employees based in the United States.
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“Since then, it has come into focus just how many of the small businesses in our communities have yet to access funds,” founders Joey Zwillinger and Tim Brown wrote in the Medium post. “Returning something you genuinely need is not easy. In making these difficult decisions, we rely on our values, and … we have decided to return the loan with the hope it finds a home where it is more urgently needed.”
The sustainable sneaker company, which launched in March 2016, reported a drop-off in sales as the outbreak hammered the global economy. Like many retailers, it was forced to close nearly all of its stores in the U.S. and internationally as well as shutdown its e-commerce operations in key markets such as Australia and its home country of New Zealand.
“Many of the uncertainties we experienced at the beginning of the lockdown continue to this day — and though we endeavor to emerge stronger than ever, we know the path won’t be easy,” read the letter. “However, despite the hurdles, we will not compromise on doing the best we can by all our stakeholders.”
Today marks the deadline for companies that have any doubt as to whether they need the funds to return the financial aid they received as part of the government’s stimulus package or risk an audit into whether they were granted such funds in bad faith. According to filings with the Securities and Exchange Commission, many publicly traded entities — including Shake Shack Inc., Hallmark Financial Services and Collectors Universe Inc. — have already sent hundreds of millions of dollars worth of their remittances back to the SBA.
In late March, the federal government had allotted $349 billion in emergency loans for small businesses that have been hurt by the COVID-19 outbreak as part of the $2.2 trillion CARES Act. Over the last several weeks, millions of firms have received more than $500 billion in low-interest loans through the PPP. The SBA released over the weekend a set of guidelines that businesses will have to file in order to apply for loan forgiveness.
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