EntreLeadership - "Should I Take the PPP Loan?"

Episode Date: April 16, 2020

Tune in to hear Dave Ramsey, Daniel Tardy, and Ken Coleman respond to some business owners' fears around Coronavirus.   Give us your feedback on these daily, COVID-19, bonus episodes: Text DAILYBONUS to 33444   Want to bring in Alex Judd and experience an EntreLeadership Workshop with your team? Click the link below: https://www.entreleadership.com/workshops   Get access to the EntreLeadership Weekly Report Tool, FREE, for you and your team for 3 months: Text TEAMHEALTH to 33444 or visit entreleadership.com/weekly-report   Follow us on social media to stay plugged in to everything we’re doing to help the small business owner win: LinkedIn Instagram Facebook Twitter YouTube Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, this is Alex Judd, and this is a bonus episode that our team recorded specifically to bring you hope and practical action items that you can use as a small business owner to tackle this whole coronavirus situation. So today we've got a special episode for you. It's taken from the Dave Ramsey show where they did a small business theme hour. Dave Ramsey, Daniel Tarty, and Ken Coleman answered questions from small business owners around the country about how to lead during this wild time. So here is today's bonus episode. It's a small business theme hour. I'm Dave Ramsey, your host. Daniel Tarty joins me, our entree leadership executive vice president and also sits on our

operating board. Ken Coleman joins me, Ramsey Personality, the Ken Coleman show. Linda's with us in Kansas. Hi, Linda. How's it going out there? It's going well. Thank you. How can we help today?

Mr. Ramsey, I'm so blessed to be able to talk to you. I'm the owner of a small business. I've been in business for over 20 years. I don't have any debts. I never took out a loan on the business. And, you know, we've been profitable. And I have three employees. Now, I was advised by my landlord that I rent the space from

and by my financial planner to apply for this paycheck protection plan. And right before the coronavirus, we really hustled. and we got a lot of business in. So it would be okay. I mean, I could get through this without taking out the loan, told that it was free money. And so what do you find? Do I take out the loan or do I lay off to the people that work for me?

I thought you said you could make it through it. I can make it through it only if I'm by myself because I'm the third person. What kind of business is it? it's a service industry specialized okay and so how long before you run out of money if you don't take the loan um i would say three months so why can you not make it three months i can make it three months without laying anybody off if i don't i would say a month and a half okay all right so why do you have to make the decision now to lay someone off or take the loan because i should admitted the loans to four different banks.

No, I mean, if you didn't take the loan. Yeah. Okay. And you went a month and a half out, assuming the loans are still available, they may not be. But you could take it then, right? Well, that's a good idea. I hadn't thought of that. Because after a month and a half, I think you could be turned around.

What service do you provide? Well, it's an art service. Okay. All right. Cool. well the thing is what we told our folks here is are you and your husband in good shape financially where you don't have to take an income from the business for a while um say we're okay for a few months yeah like for like if you didn't take an income for one month you could keep your people

yes yeah i would look at you not taking an income before i laid people off and i would look at laying people off before i took out a loan the problem with the PPP loan is it is a loan. It has a term with an interest rate. It is not a grant. It has provisions, and you can pull the law up and read it, it's available on the internet. It has provisions for forgiveness of the loan, and that's why your advisors are acting like it's free money. If you meet those provisions exactly, and if they don't change the game in the middle of it, and you're dealing with the SBA and the federal government, and frankly, I don't trust their competence, and I don't trust Congress to not change the game.

So I am never going to borrow money. I can tell you at Ramsey, the first thing that will happen is our leadership team will go without pay. The second thing will happen is that another layer of our leaders would volunteer likely to go without pay. The third thing that would happen is we would go, everybody else skips a paycheck so that nobody loses a job. and way after that would be furloughs and layoffs. And I think you're ways away from this,

and I think these guys are just going, this is free money, and I don't think it's free money. This ain't monopoly. This is real life. Those are real dollars, and they're going to want them back if you don't meet the guidelines. I disagree vehemently with the advice you've been given. Avoid the PPP.

Avoid the federal loans. You're going to regret it, America, if you don't. I'm just telling you. avoid the stinking debt. Please, guys. Please. And you can be mad at me and you can make fun of me to some dinosaur if you want,

but I'm sitting here freaking open too. So shut up. Ken Coleman, Daniel Tarty, joining me for an entree leadership theme hour. This is the Dave Ramsey Show.