PR shops were well represented among the millions of small businesses that applied for the Paycheck Protection Program according to loan data released by the U.S. Small Business Administration.
The program was part of the massive Coronavirus Aid, Relief, and Economic Security Act signed into law by President Donald Trump on March 27.
The SBA data did not break out the total amount of cash lent specifically to PR firms. But as of July 10, it reported that $65.9 billion — or 12.74% of the $517.4 billion lent altogether — was borrowed by businesses in the professional, scientific and technical services category, which includes PR shops.
A more detailed, but smaller, data set released on July 6 revealed that 618 PR firms had been approved for loans ranging between $150,000 and $10 million. The SBA did not list individual loan amounts for each company.
PR shops were among the first at the gate when the program opened, if that smaller data set is any indication. Some 502 of those 618 PR firms were approved for loans in April.
Leaders at three of those 618 firms have mixed opinions about the process as a whole, mirroring what PRWeek found when it spoke to firms shortly after the application process opened.
“Believe it or not, we actually had an overall painless experience for the most part, all things considered,” says Matt Rizzetta, CEO of North 6th Agency. “I believe we got delayed the first time around but were approved in the second tranche. We were very well prepared for the whole PPP process. Our CFO, Jim Morris, was literally on it from the first second before the program even launched.”
The process was also smooth for Finn Partners, according to CFO Martin Ettlemyer.
“Our bank...is smaller and our experience with them was fantastic,” he says. “They were very responsive and their process was very efficient. Because they are a smaller bank and therefore have a smaller list of clients, I think we benefited from that.”
However, Samantha DiGennaro, founder and CEO of DiGennaro Communications, had a decidedly different experience. Submitting the application, she says, was a nightmare.
“To the best of memory, it was a Friday mid-day. My banker was great at prodding me, telling me to get ready to log in and apply,” DiGennaro says. “But I, literally, while trying to log in, blew out my entire schedule. I was locked out of the system.”
“I called my banker because he had said the applications would be time-stamped,” she adds. “I called in a panic saying I can’t log in. It was like when you were 13 trying to call in to get tickets to a Duran Duran concert. At that point, he said there were issues, wait until Monday.”
Four days passed before DiGennaro was able to access the system and submit her application. But once she did, the platform gave no indication it had received her information or that she had even applied.
“It was like it spontaneously combusted and there was no record,” she says.
Although the bank eventually confirmed it received her information, DiGennaro was forced to wait even longer after being rejected for the first round of funding.
Eventually, DiGennaro’s bank redeemed itself by submitting her information for the second round, and she was subsequently approved. But the whole process, she says, was nail-biting.
“It got scary. In the 15 years of having my business, I have never been scared of financials,” she says. “I have always had a highly profitable business and all of a sudden my cash position was the worst it's ever been. Collections came to a screeching halt and that was difficult while waiting for the PPP. I personally loaned my company some cash just to have some money in the bank.”
DiGennaro adds that in retrospect, she understands the agencies weren't the only people under unprecedented stress.
“Looking back now, with fairness and objectivity, [the bank and the SBA] were working under incredible duress and trying to turn stuff around with more volume than they ever experienced in a lifetime,” she adds. “I get that now. I’m a fair person. But when you’re going through it... ”
One aspect of the program still up in the air is loan forgiveness, DiGennaro, Ettlemyer and Rizzetta all say. Although the SBA website lists the conditions under which the loans can be forgiven, all three note that the rules have changed repeatedly and still aren’t clear.
Ettlemyer says Finn Partners is waiting before it submits that application because “[the SBA] is still working through things there.” Rizzetta also says he thinks the forgiveness portion of the program needs some finality.
“We could use some clarity around the forgiveness piece,” he explains. “That’s still up in the air, and there’s still a level of uncertainty around that. Addressing that sooner and earlier in the process would be helpful.”
DiGennaro agrees. “There is such ambiguity around forgiveness,” she says. “There's a lot of confusion about what is being forgiven and what isn’t. At the last minute, the government changed from an eight-week period to determine forgiveness to a 24-week period.”
“We didn’t know the right way to tackle this problem strategically, and I feel like we have access to a lot of resources,” she explains. “Imagine a smaller business, a mom and pop, first-generation immigrant business that doesn’t have access to those resources. We couldn’t figure it out and we’re paying attorneys and accountants hundreds of dollars an hour.”