Paycheck Protection Program - Don't shame companies, look for these issues that really matter

Instead of PPP loan shaming, look for this information

The US Treasury and Small Business Administration have released some details about the companies that received Paycheck Protection Program loans and it includes businesses of all shapes and sizes. Yes it’s interesting to see who received them, but there is no shame in receiving one of these loans and using it to keep your employees paid.

I’ve already started to see news articles and blogs about who received them and they tend to lean towards an angle that perhaps the businesses didn’t need the loan and was only being greedy. I don’t share that view and encourage you to read Peter Reilly’s article in Forbes about why the shaming should stop.

Here are some of the items I think reporters and bloggers should look for to add value to the discussion about these loans and the borrowers:

Did the business qualify?

The CARES Act legislation defines which businesses are eligible for the loan. The terms are quiet broad and could apply to almost every business in America. If you discover a reason why the business shouldn’t have qualified, then definitely research it and report it. Otherwise, simply receiving a loan isn’t news worthy and you should look for more information or just not report it.

When did the business receive the loan?

I think this question is one that is a valid issue and should be reported. Many small and mid-sized businesses were squeezed out of the first round of PPP funding. Some analysis of which businesses were able to get funding in the first round versus the second round would add some value to the discussion about the program as a whole. Look for small businesses that tried and failed even though they followed the bank’s instructions. Then look to see who the bank actually funded and whether those businesses were instructed to follow the same set of procedures. (Hint: in a lot of cases they didn’t).

Which banks participated and when during the process?

One of the complaints during the process was that the first round was overtaken by large banks and that small banks were not able to participate. There are a lot of reasons why this could be the case, from the big banks having more resources to implement the program to the fact they have more customers to draw from. If you want to report on this, dig deeper. Were there inherent stumbling blocks that smaller banks had to deal with that weren’t there for large banks? Did larger banks have earlier access to information so they could prepare faster? Did the SBA, intentionally or not, delay expanding the lending pool that small business could choose from? Finally, did the big banks exclude some businesses because they weren’t already lending clients of the banks?

Were the funds used appropriately?

I know we won’t see the forgiveness applications, and we shouldn’t. But savvy reporters and researchers should be able to glean some insight from the business’s outward behavior. Did the business expand after receiving the loan? Did the business ultimately layoff employees in a way to suggest the loans weren’t used to keep employees on payroll?

My suggestions are just a starting point into issues that should be addressed while covering the PPP loans and who received them. Hopefully it’s just a starting point and we’ll learn more so we can understand if the program worked, what went well, and whether it should be repeated if a similar situation happens in the future. But simply listing businesses who received the loans as if it’s a scarlet letter does no good in the public discourse. If you want to add valuable information, then step up and dig deeper to provide useful insight into the program.