Propllr Blog | Onward & Upward!

Why Propllr Withdrew Its $150,000 PPP Loan Application


I don't know if it's a trend or not (saw this yesterday), but I decided on Friday night to withdraw Propllr's application for a forgivable PPP loan (estimated around $150,000).

Here's the note I sent the team about it – you know, the people whose paychecks would have been protected (slightly edited for clarity).

Propllrheads,

As you know, I put in for the PPP loan on April 8. We made it through the “app received stage” before funds ran out. 

With the passing of the new bill last week, the PPP has been turned back on.

As a result, on Friday night (10:21pm CT to be exact) I got an email from Chase about our PPP application:

Chase wrote ....

“The new guidance strengthens some of the language regarding qualifications for a Paycheck Protection Program Loan. Specifically, we would like to remind you:
When you applied you certified that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” (EMPHASIS MINE) You have the opportunity to withdraw your application if you do not feel you meet this criteria.
If you’ve already been funded, and you believe you do not meet this criteria, you can repay your loan by May 7, 2020 and the SBA will treat that repayment as being in good faith.”

So, the same night (at 10:28pm CT to be exact) I withdrew our application for about $150,000 in federal loans.

As employees whose paychecks would have ostensibly been protected by this plan, it may seem alarming to you that I did this.

I want to explain why:

1 - It was the right thing to do. 

We do not need the money to “support the ongoing operations of” our business.

Even if we never used the loan and paid it back with interest, we’d be keeping money from companies and people who need it now. 

But hey, you might ask, what about all the small businesses that are still profitable who are taking PPP funding?

Well, so far as I can tell, they shouldn’t be. 

At best, small business owners are taking a loan now in case they need it later, and if they don’t, they’ll pay it back with interest (technically that’s not how it works but the effect is the same). In this case, they're keeping money from businesses that need it the most.

At worst, this is a massive handout to small business owners (there is currently no requirement that a recipient will have to prove workers would have been otherwise fired, so getting the loan forgiven may literally be as simple as clicking a button). In this case, they're robbing the US taxpayers.

Regardless, that’s not what PPP is for and the potential for abuse makes me sick to my stomach. 

2 - Propllr is financially strong.

Taking a stand is always easier on a full stomach, and thankfully we have plenty of food right now.

While Propllr revenues fell meaningfully up to and in the wake of all of this mess, we were coming off record months so we never went into the red, and we have since strongly recovered to just about 10% below what had been record fee levels. 

But what if we get hit by another big downturn? Will there be another round of funding? 

It’s a good question, and I don’t know the answer. 

If small businesses continue to struggle, or if the Feds claw back money that goes unused for what it’s meant for, then I’d guess the answer is yes. 

What I do know is that we have money in the bank, a line of credit, happy clients (because of you), and a healthy pipeline. 

If anyone is frustrated or confused by my decision, please let me know. Happy to talk through it (individually or as a team).

Onward and Upward!

Josh