This content is from: Opinion

Stop Vilifying PPP Recipients

Accepting a PPP loan does not make the recipient a bad person or a poorly run company argues Marie Swift, founder and CEO of Impact Communications.

The views expressed in this guest column are solely those of the author and do not necessarily reflect those of Institutional Investor or its employees.

In March, as Covid-19 began to rapidly spread, businesses closed, markets roiled, and the future became greatly uncertain. I met then with my executive team and, like others throughout the country, we discussed whether we needed to apply for a PPP (Paycheck Protection Program) loan to ensure that we could avoid laying off employees should a truly dire situation become a reality.

I’ve owned and operated my own company since 1993 and lived through crazy ups and downs, including the financial crisis in 2008 and 2009. But the pandemic not only threatened our financial well-being, it threatened the health of those in our industry, nation, and world.

There was a lot of murkiness in the spring. In April, I told RIA Intel that some clients were already fee-haggling and, I believe, many of us felt like we might all be swirling around the drain. My company’s cart is attached to the proverbial RIA horse, no matter where it’s headed, and the road ahead wasn’t just unknown, it looked terrible.

Every business leader is burdened with assessing evolving situations, including opaque ones, and making the best decisions in that moment with employees and clients in mind. The PPP loan program was created to help small businesses in that circumstance; to bridge that gap of uncertainty. I’m not surprised that some of my colleagues and clients applied for and accepted PPP loans.

So, why have loan recipients been raked over the coals for their decision?

Numerous RIAs (including Carson Wealth, Ritholtz Wealth Management, and Savant Capital) and other companies in the wealth management industry (such as Riskalyze, Snappy Kraken, XY Planning Network) have been criticized by peers. But it is a pity that companies that did take PPP loans are also being vilified by the press. And then comes the social media barrage where everyone has an opinion and the mean-spirited trolls come out.

All employers have a responsibility to their employees and their clients. Livelihoods and the well-being of whole families hang in the balance. Yet, we keep seeing headlines in our industry trade publications such as, “So-and-So Took a PPP Loan” — as if it was some sort of crime, business defect or leadership fault. What really bothers me is the word “took,” as if the person or entity is stealing or doing something nefarious.

Even before the Small Business Administration made a list of PPP loan recipients public, Citywire RIA and other industry news publications began scouring ADVs and discovering on their own who did and didn’t participate in the government program. 

Some of my clients applied for and immediately returned the funds, after determining they didn’t need the money after all. Others applied for and are using the funds as the program was intended, and are considering repaying the loans versus asking for forgiveness.

As a part of our anticipatory PR process, clients now need prepared, at-the-ready statements so they are not caught flat-footed should a media outlet come inquiring. If that inquiry comes, God forbid they are busy running their businesses, taking care of their own clients, staff and family members, and are “unavailable for comment” before the journalist’s deadline. Some of our clients, such as Snappy Kraken, have been transparent and on-the-record with journalists, while others prefer to keep their reasons and rationale to themselves. 

RIA Intel and other news publications have asked if Impact Communications applied for and accepted a PPP loan. Whether we did or did not apply for and accept a PPP loan is nobody’s business but our own. We are a privately-held corporation and how we run our business is, well, our business. And so, with that principle in mind, we have respectfully declined to provide details related to any of our private financial decisions.

There are bigger, more important things to focus on.

At Impact Communications, we are finding new ways to keep in touch with clients and just be more human as we all walk through the fog together. Many of our clients and business colleagues have opened up and been more vulnerable. I've heard more thank yous and kind words of appreciation in the past three months than the past three years. That kind of appreciation and sharing will be remembered. 

As we continue pushing through the current challenges and uncertainties, I hope we will see more empathy and less finger-pointing within the financial services industry and financial planning profession. While there are probably some businesses that took PPP funds without really needing the money, let’s be careful about casting stones. It’s not fair to chide other firms and business owners without a complete understanding of their business situation.

Marie Swift, founder and CEO of Impact Communications, Inc. (www.ImpactCommunications.org), is a nationally-recognized consultant, speaker and author. She has worked with some of the nation’s top RIAs and allied financial services firms over the course of her thirty-year career.

RIA Intel is committed to publishing diverse opinions relevant to its readers. If interested in contributing a column, email Greg Bartalos, RIA Intel's editor, at Greg.Bartalos@institutionalinvestor.com