Business owners are faced with tough decisions every day that challenge them to run their businesses efficiently and to keep their employees happy. Yet, when it comes to decisions about asking for help, many often experience feelings of guilt and shame. And in the current pandemic environment, with recent government programs like PPP loans available to business owners who are facing financial strain, individuals who feel compelled to apply for these loans may be asking themselves, “Why couldn’t I have managed things more carefully?” or “Have I failed my family/employees because I did not manage the business better?” Accordingly, it is not surprising that financial advisors may find an increasing number of business owner clients suffering from these difficult emotions.

To understand the reason for the shame and guilt that business owner clients (and even financial advisors themselves, who have, in many cases, needed to utilize PPP loans) experience, it is first important to understand that there is a clear distinction between greed (that is often ascribed to PPP recipients) and subjective financial strain. As while the news media has been quick to name greed as a motivator for many business owners who applied for PPP loans, the reality is that greed (which is actually a pathology where an individual has a selfish desire to obtain more than what may actually be needed) is rarely the reason people apply for such support. Instead, subjective financial strain is more often the driving factor that determines when someone may reach out for financial help (including via government assistance programs). By contrast to greed, subjective financial strain is about how a business owner perceives the intensity of the threat facing their business; its subjective nature is influenced by the owner’s own confidence level in managing their business operations during stressful times (which can feel serious, even if ‘objectively’ the business is not necessarily in dire straits, or at least not yet). Nevertheless, a common reason for both shame and guilt associated with asking for financial support is because of the erroneous association with greed.

For financial advisors with business owner clients dealing with these difficult emotions, knowing that shame and guilt have distinct characteristics, and realizing the difference between them, can be key in helping clients cope through difficult times. Shame is an emotion borne out of the belief that one’s own character is somehow deeply flawed, where the individual feels that they are unworthy of acceptance, belonging, or love. When someone feels ashamed, they tend to use language that suggests they somehow feel they are failures or that their character is somehow insufficient. They may say that they aren’t deserving or worthy of merit. Guilt, on the other hand, is an emotion based on remorse; it usually results from an action or decision that is in conflict with one’s personal values. The language used by someone feeling guilt will focus more on an action (or inaction) and could hint that a particular decision was a bad choice. A person experiencing guilt generally doesn’t view themselves as being flawed; instead, they are more likely to express remorse or doubt over some action that was carried out in recognizing that it may not have been consistent with their values (or at least with the values they aspire to represent).

For advisors who want to help clients deal with these difficult emotions arising from such difficult financial decisions, it’s first important to identify the specific emotion being experienced. For clients who are suffering from feelings of shame, the advisor can help the client view the bigger picture and to find ways to reassure the individual that they are indeed worthy, looking to past business decisions or other aspects of their life to support this. For clients with feelings of guilt, advisors can support their client by finding ways to help them ‘right’ the wrong – whether that means reversing the action (e.g., returning loan proceeds taken if they turned out not to be needed, or helping a client apply for a loan if the guilt was because of not applying for a loan), or mitigating the effects of the decision (e.g., making a donation to a worthy cause to absolve their guilt for having otherwise taken the PPP dollars).

Ultimately, the key point is that feelings of guilt and shame are very common when difficult financial decisions are involved. In the case of taking PPP loans, the problem has been particularly acute, because the requirements to qualify for PPP loans were based on subjective financial strain (stipulating that ‘current economic uncertainty made the loan necessary’) and not necessarily objective financial strain (e.g., the business must have experienced a 50% decline in revenue to qualify). Given the subjective financial strain requirement – and the fact that subjectivity is, by definition, in the eye of the beholder – the media has associated greed with PPP loans and their forgiveness provision… resulting in many individuals who have taken PPP loans now experiencing guilt and shame. (And notably, recent proposals for a new round of PPP dollars would specifically shift from a subjective to more objective financial strain requirement going forward.) Accordingly, advisors can support their business owner clients who did pursue PPP dollars by helping them understand that the PPP funds were there specifically to be used to respond to subjective financial strain – they were established to help individuals maintain their business operations during these times of economic uncertainty. Moreover, advisors who express empathy and compassion, instead of sympathy and pity, can most effectively help their clients cope with their feelings, so that they may get back to business as usual as quickly as possible!

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