Why I Chose Not to Apply for the PPP Loan

As a small business owner here's why I chose to not to apply for the Paycheck Protection Plan (PPP), it may not be the right choice for you and your gym, but it's the right choice for me. Let me explain why.

It's obvious now that the current global pandemic has or will impact every person in America and it will be quite a while before things are back to “normal”. Truthfully, everything we previously knew may never be quite the same after this and we will be finding a new normal in the coming months.

It feels l like I am living in the TV Series "Designated Survivor" or even in some crazy sci-fi movie.

Let’s be real for a second, I have a business plan and in that business plan we had an emergency plan, but never in a million years did my emergency plan take into consideration a lengthy government mandated shut down. Maybe as first time business owners, we were a little naive, our emergency fund included things like what if one of us is out due to injury for an extended period of time? Or even, what if there is a fire or flooding that leaves the building inaccessible for a period of time? What would our plan of action be? We had discussed and planned around these, but none of them included the inability to actually operate in a physical location and certainly not in this world of physical distancing.

Either way, here we are along with all of the other business owners in our industry with a main source of revenue that came from a physical brick and mortar location trying to ensure we survive this trying time.


Our country's businesses are being faced with government requirements that many of us never imagined happening. Our unemployment numbers are creeping towards an all time high due to the economic impact of this virus. Our government has recognized this and in turn has begun issuing several stimulus packages to individual taxpayers, their families, and to small businesses. The goal of these stimulus packages is to reinvigorate the economy and reverse a possible recession by boosting employment and spending, but does that actually mean you need to apply for this government assistance?

My argument here is no, not all of us small businesses need the Paycheck Protection Plan (PPP) to survive. Maybe it’s the current state that my own business is in that gives me this perception, or I am way off and stuck in that sci-fi movie, but either way it’s okay to not need or apply for it. 


We were working with our accountant prior to Covid-19 to determine if it made more sense as our business began to expand to have our coaches continue as independent contractors (1099 employees) vs employees (W2 employees). We had not finalized the detail around when it would be best as a business to make this transition so when COVID hit, all of our coaches were still independent contractors and the PPP loan/grant does not cover a small businesses's 1099 employees. These employees would be responsible for applying for PPP via their own business operations. This does not negate the stress of having to possibly limit coaches hours/ pay, but as a team we decided to continue to work together and we would continue to pay them based on the new job duties we found relevant in this time and around the retention rate of our members. 

Second, we made a decision to close our doors to our physical operation before the government mandated that it had to be done. It was mandated shortly after the decision, but our reason behind it was simply to be able to focus on the product we were providing our customers during this time. We still had about 15% of our customers that were coming into the gym when we closed the doors.

Despite the constant changes to follow the CDC guidelines, as an owner and service provider I felt we were so focused on a small percent of our members still attending that we as a small team could not focus on the majority. We clearly explained to our customers the desire as owners to provide a high quality service to all of our customers despite their comfort level and how the decision was made to allow us to focus on a true virtual experience for those not comfortable with coming into the gym. 


Our 2 week shut down plan was changed by the states mandated shut down through June 10th (Richmond, VA, USA).

We needed to provide value to our clients through this shut down until the moment we get the green light from the CDC and the government. It was at this point we were then able to offer equipment to our members, daily bodyweight zoom classes for anyone interested, daily recorded workout briefings around the equipment rented out, a built movement library for members to go to for movement standards and guidance, 1:1 coaching as desired via zoom calls, weekly check ins, and a 21 days challenge to keep members engaged.

At the time of writing this we have lost only 6 members (out of 190), due to financial situations. While we expected some loss, we certainly didn't expect other members to step up and offered to support the gym further if needed during this time.


Our rental agreements did not change and we still paid our landlord as previously agreed in our leasing terms as well as all of our utilities for the month as well. Our coaches' pay has been adjusted to match the hours they are working, not the hours they are scheduled. I have not had to drastically cut their “approved” work hours. They have the ability to work as many of those hours as they would like to be paid for. If they need the money, they will find ways to offer value to our community by working with them in the ways we have discussed as options. Otherwise, we also have to keep in mind that we are a business and our transactions and actions can be mutually beneficial to all parties.

Yes, there is a loss of revenue here through the members that left as well as the revenue from our typical drop ins and product purchases made throughout a normal operating month, but I can’t rightfully look at my balance sheet and then look at the details of the PPP package and say we NEED this in this time to stay afloat. I’m probably not the majority in my approach, but I think of it like this, there are other businesses out there that don’t have means of actually still making anywhere close to monthly revenue needed to cover the expenses that these stimulus packages have been designed to aid with. There are also states that have begun putting a value on the services being offered during these times and controlling how the businesses can proceed with charging a member of their facility. Unfortunately, these are also the businesses that our federal government needs to “bail out” from the destruction their own state government created for them. 

My approach to government assistance is the same today as it is prior to COVID-19. It is there for the companies that truly need it and I could very well be one of those in the future, but today, tomorrow, and for a while longer, I am not. Money is not free and if your business needs the support of a grant or a loan to survive, then by all means yes, take it, but understand there is more to that grant than many realize.

Your business is also under a whole new level of control as well as public exposure. It’s less about that to me, but it is important to understand what is happening.

I’ll send you on your way with this; “Always bear in mind that your own resolution to succeed is more important than any one thing.” - Abraham Lincoln


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About the Author: 

Mandi Ellis is the Owner of Shockoe Bottom Performance with her fiancé Ryan Reeves. They live in Richmond, VA. She also works for Triib as a Customer Success Manager. 


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Mandi Ellis