Did you know that more than $160 million of the $900 million received by the nearly 300 public companies that disclosed Paycheck Protection Program (PPP) loans was returned? Over a million businesses applied to the program, but after the uproar over PPP loans to publicly traded “small” companies such as Shake Shack, CVS and Ruth’s Chris Steak House, many of those organizations returned their money early on.
If you received a PPP loan and are now questioning whether you really needed the funding, it’s a good idea to develop a strategic communications plan to protect your brand reputation. The May 18 “safe harbor” deadline to return money with no questions asked has passed, and the Small Business Administration has stated that any businesses that received more than $2 million in funds will be automatically audited on the basis of economic necessity.
There are two dangers here. The first is that companies determined to have lacked necessity may be ineligible for any forgiveness of those loans and must repay them in their entirety. The second is that borrowers could be fined or held criminally liable for claims made on their original loan applications that are found to be inaccurate. Both situations could negatively impact your company’s brand and reputation now and well into the future.
One of the best things that you can do at this point is to develop a strategic communications plan to determine how you are going to respond in the event of an unfavorable outcome. Start by deciding whether the environment and industry in which you are operating call for a reactive or proactive communications approach.
If you believe your company will be best served by being proactive with your communications, you will want to draft an internal message, a news release and a media holding statement that are clear, concise and airtight. Always communicate internally first. When you do communicate externally, make certain you have a seasoned communicator who knows how to work with and manage the news media in the lead.
If you decide a reactive communications approach is better to protect your company’s reputation and brand, you’ll want to anticipate the types of questions you may receive and be prepared to respond. It is also a good idea to have a media holding statement and employee message ready to go.
In times of crisis, business leaders are often too deep in the forest to make objective decisions for their organizations. Pay attention to your executive team and don’t be afraid to bring on a third-party communications expert who can provide objective reviews and advice if needed.