Allbirds, the New Zealand-American footwear company, will return its Paycheck Protection Program (PPP) loan.
In an interview on CNBC’s “Squawk Box” on Friday (May 8), Co-Founder and Co-CEO Joey Zwillinger said while his San Francisco-based company fit the criteria of a small business that was hurting, it appears other firms needed the cash more.
“There are lots of other companies and nonprofits out there that were unable to get the loans,” he told the network. “And we felt an obligation to our community to return it and hope it finds its way to some who really need it.”
Zwillinger was not asked and he did not reveal the amount of the loan. Allbirds did not immediately respond to a request from PYMNTS to disclose the loan value.
He said the bad publicity around the popular program was caused by large businesses with thousands of employees who applied for and received the forgivable loan.
“These employers dipped their hand into the honey pot and grabbed funds, precluding other small businesses from getting it,” he said.
When asked what impact the lack of a PPP loan will have on the wool footwear company, Zwillinger said he has pledged to keep its 339 U.S employees on staff with full pay and benefits at least through the end of July.
“That’s a big statement given the uncertainty,” he said. “But we will stand by our commitment and we feel comfortable giving back the money.”
When it initially applied for the money, the company faced unparalleled uncertainty, he said. For the first time since it launched in March of 2016, the firm was losing money, lots of it, he said. He declined to provide numbers.
“We saw PPP as a way to keep our flock whole,” he said.
Allbirds joins other bigger companies that have returned the loans including the Los Angeles Lakers (returning $4.4 million), Taco Cabana and Pollo Tropical parent company Fiesta Restaurant Group ($15 million) and Shake Shack ($10 million), among others.
In a virtual panel with Karen Webster of PYMNTS, Ingo Money CEO Drew Edwards, Planters First Bancorp CEO Dan Speight and law firm K&L Gates Partner Judie Rinearson discussed how problems with PPP have led businesses to shy away from the program.
“I think everyone’s heart was in the right place when they came out with this loan program,” said Rinearson. “They wanted this to work … But it’s really difficult and I think as time has gone by, it’s become clear that this is a lot more difficult to deal with than they had originally thought.”