Jeb Bladine: Businesses focus on 5 P’s of the 3 P’s

One of my favorite acronyms is “The 5 P’s” — Proper Planning Prevents Poor Performance. The maxim takes on extra importance for businesses dealing with “The 3 P’s” of 2020: Paycheck Protection Program.


Jeb Bladine is president and publisher of the News-Register.

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PPP is one component of CARES — the $2 trillion Coronavirus Aid, Relief, and Economic Security Act approved by Congress in April as the largest relief program in modern history. When PPP ends, between 2.5 and 3 million “small businesses” with 500 or fewer employees will receive $600-plus billion in loans of 2.5 times the company’s average monthly payroll from 2019.

Borrowers include hundreds of local area corporations, partnerships and sole proprietorships, including our company.

Most important — also most complex — is that PPP loans are forgivable, but only if used according to “the rules.” That’s where we take a deep dive down the Small Business Administration rabbit hole.

Here are the rules, produced in my own montage: You have to spend 75 percent of forgivable funds on payroll … or 60 percent … or at least 60 percent. You have to accomplish that in 8 weeks … or 24 weeks … or somewhere in-between. You must calculate your full-time-equivalent employees from past time periods using multiple analysis systems, then match that FTE mark during 8 weeks … or 24 weeks … or by June 30 … or by December 31.

Confused? Join the crowd.

Congress failed to practice The 5 P’s in crafting CARES. So in June, lawmakers approved the Paycheck Protection Program Flexibility Act to fix the law’s most serious flaw. Initial oversight required all PPP loans to be spent immediately over 8 weeks, which ignored the mandatory closure for hundreds of thousands of restaurants, hotels, activity venues and other businesses unable to call employees back to work.

That was good news for those businesses, but confusing and potentially hazardous for early borrowers.

Word spread quickly that PPP loans “have been extended to 24 weeks.” However, that mandate applies only to PPP loans made after June 5, while previous loan recipients can choose between their original 8-week plan and the extended time.

And that brings us back to The 5 P’s!

Early loan recipients should consider this statement from Forbes Magazine: “The 8-week test is much more advantageous for borrowers who are able to spend the appropriate amounts during the 8-weeks, and then apply for forgiveness and have the loan over and done with, and off of their balance sheets.”

Those borrowers need to make decisions now, despite lacking clear and complete information about loan forgiveness rules. Here’s hoping all of them practice The 5 P’s of The 3P’s.

Jeb Bladine can be reached at jbladine@newsregister.com or 503-687-1223.


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