By Joe Rubin
The Paycheck Protection Program (PPP) has provided billions of dollars in loans to millions of small businesses. Most of the recipients received relatively small loans (average size of $80,000 for the second tranche of loans), but there are a significant number of recipients who received $1 million or more, and 40,000 businesses received $2 million or more.
However, while the program clearly allows businesses with up to 500 employees to take out loans of up to $10 million, Congress and the Administration are rethinking that, and are promising to examine and audit those companies that have received more than $2 million in PPP loans. In addition to that scrutiny, however, the press is actively pursuing companies that have received loans of $1 million or more, often “naming and shaming” them and pressuring them to return their PPP funds.
Unfortunately for many businesses that do not have experience in dealing with reporters, the challenges of responding to press inquiries often go “sideways,” with business leaders straining to defend the reasons why they need this money. This has led many businesses to agree to return their PPP money, even if it is good for the business and their employees.
Specifically, while business leaders generally have time and resources to prepare for scrutiny from the government, dealing with the press presents a whole host of new and important challenges, such as dealing with hostile questions and an unknown audience, and having to respond real time.
These questions are also generally not based on legal requirements, but are often based on a reporter’s perception of “fairness” to other recipients, legitimate “need,” and simply the size of the loan. In addition, these new and novel questions and pressure are occurring in real time, and do not give business leaders time to prepare beforehand the best ways to react and respond.
As a result, companies are often forced to respond to public questioning and reporters with no support or training to help them get through these questions. It’s not surprising, therefore, that many of these companies simply give up and agree to return the PPP money, even if it could be a vital support for their business.
In other words, business leaders who accept larger PPP loans need to think carefully about how to respond to public inquiries about the loans, and why they’re important to their businesses, employees, and customers.
There are several “rules of the road” that business leaders should keep in mind as they respond to reporters:
1. It is all about employees and customers
The goal of the PPP is to ensure employers can afford to retain and rehire workers that may have been laid off as a result of declining sales, closed stores, or other adversity caused by the coronavirus. Therefore, when being questioned by a reporter about the need for PPP funds, a business leader should continually return to the benefit that the PPP money provides to their employees:
“We took PPP money because we care deeply about our employees and wanted to make sure that we have the ability and resources to continue to provide a regular paycheck during these challenging times.”
It is particularly helpful if an employer can point specifically to the number of employees who had been laid off but the company was able to rehire because of PPP funding.
Originally published at All Business