• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

PlanningShop

Plan. Start. Grow.

  • Our Products
  • Instructors
  • Entrepreneurs
  • BizGear
  • Rhonda’s Blog
  • Book Rhonda
  • About PlanningShop
  • Search
  • Our Products
  • Instructors
  • Entrepreneurs
  • BizGear
  • Rhonda’s Blog
  • Book Rhonda
  • About PlanningShop
  • Search
forgiveness

Fix PPP Forgiveness Now

May 6, 2020 //  by Rhonda Abrams

Congress and Treasury Secretary Steven Mnuchin: If you truly care about the survival of America’s small businesses, fix the forgiveness provisions of the Payroll Protection Program (PPP) and fix them fast. Moreover, we need additional help for millions of small businesses who are facing annihilation.

PPP forgiveness provisions are, in a word, a mess. Right now, the PPP is:
  • creating incredible confusion
  • pitting small business owners against their employees
  • conflicting with the reality of many small business PPP recipients
  • not addressing significant non-payroll expenses of small businesses

When Congress enacted the PPP, rather than providing simple grants to the smallest businesses, they created a complex system. To qualify for loans to be forgiven, small businesses must rehire their workers for eight weeks. Even if they aren’t open; even if there’s no work.

That seems silly on the face of it, doesn’t it? It’s proven to be totally frustrating. Sure, that works for those small businesses which continued operating throughout the Covid-19 crisis or that have been able to quickly re-open at full or near-full capacity. For the overwhelming majority of small businesses still closed or facing significantly reduced demand? These provisions make little sense.

Worse, the forgiveness provisions are far from crystal clear. I spoke with both my accountant and a business lawyer the same day; they gave opposite interpretations of a key forgiveness provision. I’ve repeatedly been advised that whether a business has met the forgiveness provisions would be “up to individual banks.”

In other words, what one bank will allow, another might not. Ridiculous!

But what may be the absolute worst provision is the PPP pits small business owners against their employees. I know a dental hygienist who was laid off early as patients stayed away, worried whether a teeth cleaning was safe. Nevertheless, her boss is opening the office to meet PPP forgiveness provisions, giving hygienists ultimatums: return to work or be fired. Because it’s likely there will be vastly reduced customer demand, he’s offering only part-time work, and the pay won’t cover her daycare costs. On top of this, dental hygienist is listed as the number one most at-risk job for Covid-19. She’ll be putting her life at risk and losing money. Or, she’ll lose her job—a job she loves. This is not necessary.

It’s also leading to a backlash against Republican governors whose efforts to re-open their states are seen as cynical ploys to help larger businesses meet PPP requirements and force workers off unemployment even when their health may be at risk.

Let’s fix the PPP forgiveness provisions ASAP and enact new programs to help all small businesses survive.

Fixes for PPP:
  • Allow the smallest businesses to convert PPP loans into a grant. If a small businesses received $100,000 or less, let them file a simple form and have the loan automatically forgiven.
  • Extend the eight weeks forgiveness provision to December 31, 2020, or eight months after the business re-opens if still on lockdown. This enables them to rehire employees when there’s actually likely to be customer demand, reducing conflict with employees.
  • Widen the use and percent of forgiveable funds so it better matches the current reality of small businesses, enabling businesses to use the funds for higher rent, utilities, equipment maintenance/leases, insurance, operating expenses, etc.
  • Allow small businesses to deduct expenses they made under PPP as normal business expenses. Congress clearly intended PPP forgiven loans to be non-taxable. Now, Treasury Secretary Mnuchin is saying expenses covered by PPP forgiveness will not be tax-deductible. By disallowing normal business deductions, he is, in effect, taxing forgiven PPP dollars.

What is needed in addition to fixing the PPP forgiveness provisions is more money, more programs, more time. With such an uncertain future, small business owners do not want to take on debt. Simple, straightforward grants are necessary.

More programs and more cash are critical. In the first round of PPP loans, only 5.7% of America’s small businesses received funding. Experts warn that it may take more than a year to get the virus under control. Small business grant and aid programs must last throughout the duration of the Covid-19 crisis and recovery.

America must act fast to save tens of millions of small business jobs. According to Main Street Alliance, “countries that elected direct subsidies to business have been spared the massive spike in unemployment we have experienced here in the US.”

A coalition of more than 60 small business organizations warned: “With little or no revenue coming in, entire sectors of the small business economy face extinction.”

That would be a disaster. Half of all jobs in America are in small businesses. If we don’t save them, America will not recover from this crisis.


Copyright Rhonda Abrams, 2020

This article originally ran in USA Today on May 6, 2020

Share this:

  • Twitter
  • Facebook
  • LinkedIn
  • Email

Category: Rhonda's BlogTag: COVID-19, employees, entrepreneurship, forgiveness, loans, PPP, rhonda abrams, small business, USA Today

Previous Post: « Small Biz Update: PPP Loan Forgiveness Strategies
Next Post: Money, Money, Money in your Small Business Money»

Primary Sidebar

Subscribe to Rhonda's Blog via Email

Instagram @rhondaabrams

Sign up for my newsletter - get small business tip Sign up for my newsletter - get small business tips and the latest info. sent straight to your inbox! Link in profile~
.
.
#smallbusiness #newsletter #smallbizguru
What’s old is new again! How to stay in front of What’s old is new again! How to stay in front of your smallbiz customers, in my latest @usatoday column. Link in profile~
.
.
#smallbusiness #customer #digitalmarketing #smallbizguru
National Doughnut Day on Friday?? Great way to sta National Doughnut Day on Friday?? Great way to start the weekend!! Enjoy, and go find yourself some doughnuts 😋 🍩 
.
.
#smallbusiness #fridayfeeling #nationaldoughnutday
#smallbusiness #tuesdaythoughts #entrepreneur #ins #smallbusiness #tuesdaythoughts #entrepreneur #inspirationalquotes
“And I’m proud to be an American, where at lea “And I’m proud to be an American, where at least I know I’m free. And I won’t forget the men who died, who gave that right to me.” - Lee Greenwood -
.
.
#memorialday #neverforget
We're heading into a long weekend! Here's to some We're heading into a long weekend! Here's to some R&R, productivity . . . whatever your small business needs~
.
.
#smallbusiness #weekend #entrepreneur #fridayfeeling
Sign up for my newsletter - get small business tip Sign up for my newsletter - get small business tips and the latest info. sent straight to your inbox! Link in profile~
.
.
#smallbusiness #tips #entrepreneur #newsletter #smallbizguru
#smallbusiness #tuesdaythoughts #inspirationalquot #smallbusiness #tuesdaythoughts #inspirationalquotes
Here's to a great week, small business owners! . . Here's to a great week, small business owners!
.
.
#smallbusiness #smallbusinessowner #mondaymotivation
My Tweets
  • Sign up for my newsletter - get small business tip Sign up for my newsletter - get small business tips and the latest info. sent straight to your inbox! Link in profile~
.
.
#smallbusiness #newsletter #smallbizguru
    What’s old is new again! How to stay in front of What’s old is new again! How to stay in front of your smallbiz customers, in my latest @usatoday column. Link in profile~
.
.
#smallbusiness #customer #digitalmarketing #smallbizguru
    National Doughnut Day on Friday?? Great way to sta National Doughnut Day on Friday?? Great way to start the weekend!! Enjoy, and go find yourself some doughnuts 😋 🍩 
.
.
#smallbusiness #fridayfeeling #nationaldoughnutday
    #smallbusiness #tuesdaythoughts #entrepreneur #ins #smallbusiness #tuesdaythoughts #entrepreneur #inspirationalquotes
    “And I’m proud to be an American, where at lea “And I’m proud to be an American, where at least I know I’m free. And I won’t forget the men who died, who gave that right to me.” - Lee Greenwood -
.
.
#memorialday #neverforget
    We're heading into a long weekend! Here's to some We're heading into a long weekend! Here's to some R&R, productivity . . . whatever your small business needs~
.
.
#smallbusiness #weekend #entrepreneur #fridayfeeling
    Sign up for my newsletter - get small business tip Sign up for my newsletter - get small business tips and the latest info. sent straight to your inbox! Link in profile~
.
.
#smallbusiness #tips #entrepreneur #newsletter #smallbizguru
  • Footer

    Our Products
    Instructor Central

    Privacy Policy
    Contact Us

    • Email
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter

    Copyright © 2023 PlanningShop · All Rights Reserved · Site design by paulinaart

    This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. ACCEPT Read More
    Privacy & Cookies Policy

    Privacy Overview

    This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
    Necessary
    Always Enabled
    Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
    Non-necessary
    Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
    SAVE & ACCEPT