By the time this is over, there’s one letter small business owners may never want to see again: P.
The Paycheck Protection Program, or PPP for short, was initially passed under the CARES Act as a way to help business owners keep employees on the payroll, as well as to help cover rent while the economy was shut down. But today it’s become a bureaucratic game of Clue that has left many of my own clients, and likely countless other small-business owners across the country, throwing their hands in the air and wondering if it isn’t better to simply give the money back.
Perhaps they should rename it PPPSD — Paycheck Protection Program Stress Disorder.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Rules are constantly changing, the IRS and Congress are clashing over what’s next, and rumors and speculation about whether PPP will be extended, by how much, and for whom are running rampant. I feel dizzy just thinking about it.
But what I’m telling my clients right now is to worry less about that problematic letter and instead focus on what they know how to do best: run their business.
And I’ve been trying to focus on what I know best: staying up to date on the changes, reading through the documents, decoding the laws and stipulations, and sharing that with my clients in a way that is easy to understand and helps to enable their businesses to survive and thrive on the other side of this pandemic.
That doesn’t mean throw PPP out the window — you should consult an expert and do all you can to receive the full benefits the program has to offer. But as the first PPP loan forgiveness applications will soon be submitted, it’s become such a distraction that some small-business owners I know have lost sight of critical business decisions that could mean the difference between keeping the doors open or not.
And for some sectors, there is expected to not only be a full and fast recovery, but immense opportunity and growth. For those in the restaurant and travel spaces, there may be a slower climb back that requires additional aid, but for other industries it’s critical that business owners don’t miss out on the potential opportunities while they’re busy just trying to keep track of regulatory changes.
Imagine the worst-case scenario: Your PPP loan isn’t forgiven. Even in that case, that means you got a loan at a remarkably low interest rate of 1%. While I understand the reluctance to take on more debt in the current economic climate, I also see that there’s an end in sight, and the opportunity to get a loan at that rate doesn’t come along very often anywhere in the history of American lending.
With the Senate recently voting to extend the amount of time businesses have to spend PPP loans through the end of the year, as well as adjusting down the amount of PPP funds that need to be spent on payroll to 60%, this should also help to ease your PPPSD.
When states first started enacting stay-at-home orders, you probably did what most small-business owners do: You planned. You thought about what your business would need to do in order to survive, or how you could pivot, or what the landscape would look like not just two months down the line, but two years.
Yes, you probably made a plan. And now I’m hearing from clients who seem to have forgotten those plans.
This is not the time to discard all the hard work you’ve done to make it to this point just because PPP is a pain in the neck. Stick to what you know how to do best, talk to your advisers, and ensure you’re able to survive for the long haul.
But I won’t begrudge you if you experience a little shiver every time you see a certain letter.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
IRS Watchdog: Three Problems the IRS Must Address in 2025IRS The tax season is over, but new changes to the IRS can pose risks to your taxpayer experience.
-
Social Security's First Beneficiary Lived to Be 100: Will You?Ida May Fuller, Social Security's first beneficiary, retired in 1939 and died in 1975. Today, we should all be planning for a retirement that's as long as Ida's.
-
An Investment Strategist Demystifies Direct Indexing: Is It for You?You've heard of mutual funds and ETFs, but direct indexing may be a new concept ... one that could offer greater flexibility and possible tax savings.
-
Q2 2025 Post-Mortem: Rebound, Risks and Generational ShiftsAs the third quarter gets underway, here are some takeaways from the market's second-quarter performance to consider as you make investment decisions.
-
Why Homeowners Should Beware of Tangled TitlesIf you're planning to pass down property to your heirs, a 'tangled title' can complicate things. The good news is it can be avoided. Here's how.
-
A Cautionary Tale: Why Older Adults Should Think Twice About Being LandlordsBecoming a landlord late in life can be a risky venture because of potential health issues, cognitive challenges and susceptibility to financial exploitation.
-
Home Equity Evolution: A Fresh Approach to Funding Life's Biggest NeedsHomeowners leverage their home equity through various strategies, such as HELOCs or reverse mortgages. A newer option: Shared equity models. How do those work, and what are the pros and cons?
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the FairwayThink of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty MovesIf you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
