Applying for Federal Relief Funds for Your Business? Read This First

The coronavirus has shuttered businesses across the country, forcing millions to lose their jobs. In response, the federal government launched several emergency programs to help small businesses hit hard by the economic downturn. The marquee initiative has been the Paycheck Protection Program (PPP), part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. The PPP provides federal loans to help small businesses keep employees on payroll during the coronavirus pandemic. It was implemented quickly, on a “first come, first serve” basis with few restrictions, vague rules and little guidance, putting much of the onus on banks and borrowers. As a result, PPP got off to a rocky start and there has been much confusion — and criticism — around who could apply for the loans. 

Headlines in recent days have been filled with the names of large companies being criticized for receiving millions in PPP funding. Shake Shack, Ruth’s Chris Steak House and Potbelly are just a few of the big business, brand names called out for receiving PPP funding intended for small businesses. (Following a backlash, all three pledged to return the funding.) While these companies may not have broken the letter of the law in accepting PPP funding (there is an exception for restaurants), they stand accused of breaking the “spirit of the law.” Treasury Secretary Steven Mnuchin has vowed to audit the program and punish companies that took PPP funding without meeting the criteria for the loans.

The scrutiny of the PPP will likely only increase, and participants should prepare for greater oversight. Sen. Marco Rubio (R-Fla.), chairman of the Senate Small Business Committee, announced his committee will dig in and conduct aggressive oversight into the use of the PPP. “The bottom line is we’re going to know one way or the other who got this money,” Rubio said.

So what considerations must business leaders weigh as they navigate their ability to access federal support in wake of the coronavirus pandemic? 

First, always remember that receiving taxpayer money is a contract with the public and one that could adversely affect an organization’s reputation if taken lightly. There is an expectation that companies need to do right by the taxpayer and be transparent about their use of government funds. Employees, customers, investors and other stakeholders need clear, factual and concise messaging from business leaders taking relief funds. Taxpayers and policymakers will need — and deserve — assurances that money is being spent appropriately.

Before applying for federal support, consider the following:

— Assume that any businesses participating in the relief programs will be disclosed.

— Scrutiny will likely come along with any acceptance of federal funding, rightfully so. Be sure to ask yourself, do I really need the money? Have I exhausted all other financing options before applying for federal support?

— There could be tough questions from customers, reporters or policymakers about accepting relief funds. Are you prepared to answer those questions and to share why you deserve the funding and how it is being put to use?


Answering those questions effectively will help prepare you to navigate the reputation gauntlet that comes with accepting government relief. In most cases today, the public will not blame businesses for needing the assistance, a direct contrast to the 2008 financial crisis. The funds are not viewed as a “bailout” but as relief, and that difference puts the obligation on the recipients to hold up their part of the bargain.

There are important guidance points, however, to help businesses protect their reputation around receiving federal relief:  

— Communication is key. Always be transparent, not only on taking funds in the first place, but clearly communicating to stakeholders about the purpose and plans for the loan.

— Be prepared to answer questions regarding acceptance of funding — especially if owned by a larger company.

— Focus like a laser on the jobs saved with the funding and your role and responsibility as an employer.

— Take time to work with employees to understand what their job means to them and who it supports.

— Collect anecdotes and stories that humanize the emergency relief and illustrate how it is making a real difference.

— Provide clear internal communication to employees about participation in the program and how funds are being used. Ensure they know how to access additional assistance, if needed.

— Collaborate with federal, state and local governments as well as other business leaders. Learn from one another and share best practices.

— Highlight the impact the funding will have on your businesses’ role in the community and your efforts to help others. 

— Keep your house in order, as managerial mistakes in the implementation of funds could harm your long-term reputation. The buck stops with you, the business leader.


Most importantly, always remember that the public’s trust is yours to lose.


The authors are communications professionals at Edelman in Washington, D.C.  Sean Neary is the general manager, financial communications. Ed Cafiero is a senior vice president, public affairs.

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