You Took a PPP Loan. Now Get Ready to Talk About It.
Late on Tuesday, December 1, The U.S. Small Business Administration released detailed information about the borrowers who received loans from the federal government's $659 billion Paycheck Protection and Economic Injury Disaster Loans Program. The information released includes the names, precise amounts, addresses, industry codes, and lender information for the COVID-19 relief program's roughly 5.2 million loans. The SBA had previously only released detailed information for loans above $150,000 and with dollar ranges rather than specified loan amounts. A searchable database is located here.
Did your company, or perhaps one of your clients, apply for and accept a business loan from the Paycheck Protection Program (PPP) established by the US Federal government’s Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses, self-employed workers, sole proprietors, nonprofit organizations and tribal businesses continue paying their workers ? If so, you must be prepared to answer questions about your acceptance of that loan if asked about it.
We have two former journalists on our staff. Thom Fladung, our managing partner, is the former managing editor of Detroit Free Press, The Plain Dealer and the Akron Beacon Journal. Before coming to Hennes Communications, Howard Fencl ran TV newsrooms for more than 20 years. Both agree that once the loan recipient information goes up on a searchable, public database, it will immediately become “low-hanging fruit,” with news editors sending reporters out to do follow-up stories about who took what, how much and why.
Frankly, we don’t have any problem with this disclosure. The SBA routinely makes public information about the dollars loaned to small businesses, so why should PPP dollars, disbursed from the U.S. Treasury Department, be any different?
What’s different this time is the sheer size of the PPP program and the fact that an extraordinary number of companies and professional service firms – and their clients – received these “forgivable loans,” in some cases worth multi-millions of dollars, as did a wide variety of schools and other organizations with large endowments.
While there are scores of reasons – all 100% legal and ethical – why a law firm or other organization took a PPP loan, crisis management specialists know that optics often overshadow facts. And it isn’t just reporters who will shine a spotlight on loan recipients. Social media activists may also seek to highlight businesses and organizations in the community that received the dollars – with a direct or implied demand for justification.
If your company or client’s business applied for and accepted PPP dollars in good faith, you must be prepared to defend the loan if questioned by the media or other stakeholders – without looking defensive.
As our good friend, Richard Levick, has said repeatedly, “Use peacetime wisely.” Levick recently suggested making sure you’re ready to answer such questions as:
Did you easily fall within the PPP guidelines or did you have to manipulate the rules to fit?
Exactly how was the money used?
Did you have access to other funds?
Specifically for schools, what has been your historic commitment to scholarships, diversity and economically disadvantaged students? What would the absence of PPP money mean for the future of these programs?
How do you currently support your community and the small businesses within it?
Levick further suggested that companies and organizations that come across more sympathetically in this equation will more easily deflect criticism than those who appear to have profited from this stimulus plan.
Now is the time to think about those optics, about how your partners, clients, employees, customers, friends – as well as traditional and social media outlets – are going to think when they find out how much you received.
We are not recommending spin. We’re talking, instead, of the exact opposite – transparency. If you took the dollars, we’re suggesting the creation of clear, succinct, direct messages and talking points that answer the questions most likely to be asked.
Additionally, once these questions are asked, you’ll probably have just minutes to provide an answer to reporters who are on deadline or social media speculation that will increase by the moment.