75F, a Twin Cities energy-management software firm, last week received a nearly $600,000 federal small-business loan to help in the initial stage of the coronavirus downturn, but then executives decided to not to take it.
"We were in a more fortunate position than some other companies," Deepinder Singh, the company's founder and chief executive, said. "We thought we could survive without federal money."
A handful of companies around the country have made similar announcements after the Small Business Administration last week distributed $350 billion in the Paycheck Protection Program authorized by Congress and President Donald Trump in March.
The program ran out of money before meeting demand. Members of Congress over the weekend negotiated a new infusion for funds, chiefly being distributed in the form of forgivable loans.
Shake Shack Inc., the New York-based restaurant chain, said Monday it returned $10 million it initially sought from the program. It called the SBA qualifications confusing and criticized the government for not making enough funds available to small firms. The company said it raised money from other investors to help it get by for now.
At Burnsville-based 75F, executives also realized the firm could tap other resources to keep employees paid rather than take government funds. Singh said he called the firm's outside investors for approval to return the SBA money.
"We concluded it was the right thing to do," he said.
75F last year raised $18 million in venture capital, one of the biggest hauls in 2019 for a Minnesota company, to build its operations and meet demand for its systems, which optimize the heating, cooling and airflow in commercial buildings.
75F hasn't laid off any of its 125 workers, but revenue is down sharply since the virus swept through the U.S., slowed construction and forced some businesses to temporarily close.
"We've seen an 80% reduction in revenue from what we had budgeted," Singh said. "Second quarter will be a dud. We're completely overhauling our processes. We've been flying and now we're forced to land. So, we work on the plane."