July 13, 2020
In May, I wrote a blog about unintended consequences of the Payroll Protection Program (PPP) and potential reputation impacts on companies that received money.
As I noted, the negative impact to the reputation of some organizations that received the loan was swift and, in some cases, led to promises of returning the money with public apologies. Since that time, reporters and other media outlets have continued to press the recipients for information about those funds. Was it really being used as intended? Did you have access to other capital when others did not? Who took the largest loans? As a result, many organizations were pressured to discuss their thinking on taking a loan in the first place.
And just last week, the government added a new search tool that gives just about anyone access to the details of any company that took advantage of the loan. Now every media outlet in the country has an easy story to tell about a company in their area following this grant from the government. It’s all there at the click of a button or two.
So now what?
Our advice really hasn’t changed. If your organization accepted PPP funds and used them as intended, there’s no reason to apologize.
While every company has its own rationale and context for taking the loans, the only wild card in the equation is if you are a large organization that has access to a lot of capital from other sources and yet, still chose to take advantage of millions of dollars in the federal PPP loan. Fair or not, that could raise eyebrows even if you did nothing wrong and used the funds exactly as prescribed. There’s still nothing to defend and you always have the option of returning the money.
If you are contacted by media, approach the situation as you would with any other business inquiry. Does responding help you or potentially hurt you? Think about what you would say to any client, vendor, investor, employee or other audience you care about if they ask you about it. Inquiries can come from a lot of sources so be ready to respond in a non-defensive way.
Want to discuss this topic as it relates to your organization? Email me at mbarkett@dix-eaton.com.
