What is influencing the decision of many small businesses to forgo Paycheck Protection Program (PPP) loans? Allyson Baker, chair of Venable’s Financial Services Group, was featured on CNN’s The Lead with Jake Tapper, where she discussed how the fear of repercussions forced some small businesses to reconsider accepting money from PPP, the $660 billion loan program set up by the Coronavirus Aid, Relief and Economic Security (CARES) Act to help small businesses avoid layoffs during the coronavirus pandemic.
According to CNN, as public outrage grew over the tens of millions of dollars provided to large companies, the Trump administration pledged penalties, including prosecution, for companies that may be found to have improperly taken out loans. The details of those penalties and which companies would actually face them shifted over weeks, forcing an impossible choice on some of the small businesses the program was designed to help.
“We have had a number of instances where folks declined to take the money,z’ said Baker. “Unfortunately, in some cases they had to lay people off, which is the exact opposite, I think, of what you would want to hear out of a program called the Paycheck Protection Program.“