Guest Editorial: "Even If Offered a Loan from the Paycheck Protection Program, I Probably Won't Take It"



Sounds like a very wise decision, based on sound reasoning.


Your points are amazing and I honor and respect it. I had this very conservation last night by one of my prospects and asked her to send me an e-mail because while it’s a valid concern and I don’t blame you for thinking this it can also be turned into a very valid feedback to the SBA/Treasury decision makers. The guidelines are evolving fast and being defined more and more. The number 1 goal of the SBA was to put it out there because of the mass pressure of business owners like yourself has put on them. They are super overwhelmed and can’t keep up as you already know. One of the ways we can continue to build a community around this time of crisis is help us Bankers bring feedback to our in-house SBA Team so they can discuss it with SBA decision makers in the hopes of them making changes for the better. Thank you for this great article that I will now then bring back as feedback.


I am having the same internal debate. The benefits of this loan are dependant on two things, loan origination date and when I can open again. What good does it do the business to pay my employees to stay home when what I will really need is money to make payroll after we open, no one is going to work for free and it's unlikely business picks up right where it left off, people will be broke!!! This loan worked when the plan was to reopen at the end of April, I don't think that's going to happen.


This article is an incorrect and harmful analysis of the situation. The SBA paycheck protection program is SPECIFICALLY DESIGNED to keep your employees whole during this pandemic. These "loans" do not have to be paid back if they can be proven to have been spent responding to the medical or economic conditions brought forth by the pandemic. They have specific forgiveness provisions (in both the PPP AND other debt forgiveness programs IN the SBA arsenal) that you need to read again.



The article was well written and has many accurate points but you are looking at this incorrectly. You must spend the money on payroll and utilities/rent over the 8 weeks after the loan is originated. We don't know when these loans will originate (when you sign the paperwork and receive the money) but I expect that we will start seeing money in accounts the week of April 13th at the earliest and April 27th at the latest. If we open things back up the 1st week of May, you'll have 6+ weeks to pay your staff, utilities, rent, etc. and then be able to deduct those expenses from what you have to repay. All the income you receive over that time period can be used to dig out of the expense of being closed for 6-8 weeks and the likely lower sales you'll have after things open back up. The terms of this loan are not ideal but they are very useful if you consider that it's fully funding your payroll, rent, and utilities for 8 weeks. I imagine you could delay the origination of the loan, closer to when you feel you'll open back up.


AnonyMBA claims Stevens' article is incorrect then links an article that mostly backs up what he wrote (although I see that some of the specifics have been slightly improved). I don't see the problem with the article, and probably any "inaccuracies" are due to the situation evolving since the article was written.


As a fellow small (retail) business owner, I think you nailed it. Some of the commenters above did too. In particular, flexibly in when the funds are spent, and the terms under which it can be forgiving, would be huge. As it is, the PPP loan is not designed to help small business. It's designed to shift the burden of providing a social safety net onto the shoulders of small business owners. Corporate bailouts, on the other hand, are very nicely designed to insulate investors from the risks of their investments. In other words: shareholders of corporate giants get protection from risks, owners of little companies get offered more risk.


@6 and @8
My claim is that the author is incorrect when he says he is considering not applying for these programs and is considering letting people go right now because of that.

I'm sure he has a line of credit that he can expand right now to offset those costs. The timing is important in terms of making himself whole, but again the PPP (which small businesses can take advantage of and should because it's literally the only source of funds available rn) is for this exact purpose.

The rest are just excuses. Small business owners signed up for the risk by starting the business. They have obligations to their employees, and should do everything they can so that everyone they are responsible for isn't suffering unnecessarily rn.

Get a better accountant (or another one, which also counts as a pandemic expense). It's literally all small business owners need to do. Tax deadlines have been extended, and there is time to get all this money lined up. Don't fire your employees because your panic or your ideology precludes common sense and compassion.


My business is in a very similar situation though not a restaurant. We are designed to bring people together, it is literally the core of my business model. I have laid off all my staff and switched to an entirely new business of online retail.

Every single point you noted was spot on. Every concern. No answers here, just solidarity.