COVID-19 dominated the U.S. economy, and small businesses were profoundly affected. For a few months, the U.S. was under stay-at-home orders, and nonessential businesses were closed. During the lockdown, many businesses had to lay off workers to continue functioning. The answer to helping small businesses hire back employees was through the Paycheck Protection Program. While the PPP supported these businesses, a few large companies came under fire at the beginning when they used loopholes to gain loans as large as $10 million. Since then, transparency of the program has been under question.
As of last week, the SBA and Treasury Department announced that they would enhance the transparency of the program by making information about borrowers’ public. For businesses that borrowed more than $150,000, their business names, addresses, industry codes, business type, demographic data, nonprofit information, jobs supported, and loan amount ranges will be made public. While an increase in transparency is a good thing, releasing all this information is worrisome for business owners as they must watch out for who would want the information and how it can be used.
Today is an era where hackers and con artists are abundant. It may be hard to predict the fallout of the information released, all the information becoming public is a marketer’s dream. Business owners need to be prepared for the attack of spam that is bound to ensue. About 75 percent of the loans approved were above the $150,000, which means that of the 4.8 million loans given, 3.6 million businesses will have all the information mentioned above released. Even companies that received a loan under $150,000 will have information published, although it will be broader.
Business owners need to not only be aware of spam but also need to be prepared to defend the loan to stakeholders or media without looking defensive. Did they easily fall within the PPP guidelines? Did you have to use loopholes to receive one? How was the money used? Did they have access to other funds? These are just a few questions owners will need to be ready to answer with their information being released. While the exact number of each loan will not be published, businesses will be put into categories depending on the loan size. The ranges include:
- $350,000-1 million
- $1-2 million
- $2-5 million
- $5-10 million
The PPP was used to help small businesses during the lockdown because of the COVID-19 pandemic. Since a few large companies used a loophole that allowed them to borrow loans up to $10 million loans at the beginning, the use of the loans has been under question. Information about businesses that received the loans is being published to improve the transparency of the program. With their information being released for everyone to see, businesses need to stay aware of spammers that will target their business and be ready to answer questions on the use of those loans.