Axios returns a PPP loan – Axios
Axios, which qualified for a federal paycheck protection program loan to avoid layoffs, will repay the money, after reaching a deal for an alternative source of capital.
Why is this important: In the four weeks since Axios applied for the loan, based on the large business losses linked to the coronaviruses, there was a public backlash against various companies for agreeing to the PPP, including us.
- Some critics say media companies like ours shouldn’t qualify, period. Others argue that venture-backed startups should seek capital elsewhere, even if it hurts the business.
What changed? Two things:
- The program has become much more politically polarized since its inception.
- We continued to explore other capitals. Over the past week, a new alternative source has emerged, giving us the confidence to return PPP funds.
We unveil our thinking by returning the funds with the same transparency as our decision to disclose that we were eligible for a loan:
- The intention of the program was to provide financing to companies with fewer than 500 employees (we have 190) that would have to cut jobs without it and could not get capital at a reasonable cost elsewhere.
- It described our situation a lot. Our physical events business has been shut down and some ad buyers have canceled contracts. Our primary concern was, and remains, protecting the jobs and safety of our employees.
- But the program has become a divisive factor, turning into a public debate on the value of specific industries or companies.
- When applying for a loan We felt like the right and prudent thing to do a month ago to protect our 190 employees, if we knew then what we know now we would have gutted it and hoped for the best.
The bottom line: We remain fully committed to protecting the jobs of the 190 existing employees.
- We hope this will free up $ 4.8 million in loans for other small businesses that are still struggling to find capital.