[danans]

Downside protection to whom?

A significant amount of the terms of the loan forgiveness rely on employers "doing the right thing" by their employees: not docking their pay up to 25% while still claiming the full loan forgiveness. So in this case the lender and the employees are holding the bag for that 25%.

Why allow the employers to convert the full loan to a grant while reducing employee pay? Looking at it the other way, why wouldn't an employer reduce employee pay by up to 25% when they can pocket the difference?

Like I said, we'll see how that works out.

[qqqwerty]

The loan can only be used on qualified expenses, roughly rent, payroll, and utilities. And there is a $100k cap on qualifying salaries. So in the hypothetical scenario where revenue goes to 0, the owner can only use the money to pay their own salary up to $100k.

Of course, in the real world, I assume revenue for most companies won't go to 0. So there are probably cases where they could offset payroll costs with the loan while pocketing the revenue that would have been used for payroll. In the grand scheme of things though, the loan is only ~2.5 months of payroll, and the businesses that won't feel the impact of this coming recession will be few and far between.