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.
-
Stock Market Today: Cautious Investors Let Stocks Drift LowerMarkets weigh encouraging trends for earnings and tariffs against concerning signals from U.S. consumers.
-
A Smart Way to Combat Economic RollercoastersSavings With rates on CDs remaining high for now, a CD ladder allows you to maximize your returns with flexibility to your cash when you need it.
-
Time to Spring-Clean Your Finances: A Financial Professional's Four Steps to Tidy Them UpA midyear review of everything from spending to saving, with adjustments as needed, can set you on track to financial security. Plus, don't forget to check in on your workplace benefits.
-
Why a Law Firm Secretly Recording Client Conversations Is Wrong (and Illegal)A law firm that has been recording client conversations without the clients' knowledge or permission and has threatened employees if they speak out faces legal and ethical challenges.
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last LongAccording to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond InvestorsHigh-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
