August 9, 2020
AliExpress WW
Firms say Coronavirus small business loan database contains big mistakes

Firms say Coronavirus small business loan database contains big mistakes

AliExpress WW

Geraldine Brimley

AliExpress WW

Source: Geraldine Brimley

They cannot show you the money because they have not received it, no matter what the government says.

Several companies that allegedly received forgiven loans under the federal aid program said they hadn’t applied for – much less received – funds that were described in detail in the loan database published on Monday.

This database contains information on the lion’s share of 521 billion. Dollars. The United States, which has so far been approved as part of the Salary Protection Program, which aims to help small businesses affected by the coronavirus pandemic.

Data released on Monday reflects more than 661,000 firms that have been approved for at least $ 150,000 in the program. Despite the fact that this is only a small part of the nearly 5 million companies that have been approved for PPP funds – most of them have been approved for less than $ 150,000 – this is large enough to potentially contain many data errors.

Venture capital firms Index Ventures and Foundation Capital, along with the scooter company Bird, said they did not apply for PPP funds, despite the fact that they are listed in the database as approved for banks by millions of dollars under this federal program. ,

And a woman who lives in the Milwaukee area told CNBC that she was surprised that her list on the list published by the Treasury and Small Business Administration was approved for a loan of between $ 5 and $ 10 million.

The woman, 72-year-old Geraldine Brimley, applied for a PPP loan of about $ 9,300 through Bank Radius and received a little less than $ 2,300. She runs a small company that delivers mail to rural clients of the US Postal Service.

“How did it happen?” asked Brimley when she was told that her name was indicated as approved for a loan of $ 5 million or more. “How do they make a mistake like that?”

“I could use that,” she said, referring to the large amount of money that she had not actually received.

Kathleen Barrett, spokeswoman for Radius Bank, said that when Brimley or someone acting on her behalf submitted an online loan application, the extra “zeros” were accidentally entered in one section of the application, which gives the impression that she asked for 9 million dollars.

Barrett said that Radius, when he looked at the application, according to the documents that Brimley submitted, saw that she was actually looking for only $ 9,000, and that the bank had corrected the error by indicating a higher amount before processing the loan.

Barrett said that although the SBA database, which was released on Monday, contains the wrong, much higher range that was approved by the bank, the internal database contains the correct, lower amount that it actually received.

“SBA reporting is delayed or incorrect,” Barrett said.

An SBA spokesman declined to comment on CNBC’s Brimley case or those related to firms that said they did not receive loans.

The same SBA database shows that Index Ventures has been approved for a $ 2 to $ 5 million loan from Radius Bank.

An Index Ventures spokeswoman told CNBC: “I can confirm that Index Ventures VIII has never applied for a PPP loan.”

“This record is erroneous, because although it indicates us as the name of the company, this is not our address or incorrect information about our fund. Our team of lawyers finds out why our name is listed, and tries to fix it as soon as possible, ”a spokeswoman said.

When asked about the Index Ventures loan, Barris from Radius said: “We noticed that technical reports were made in the reports that the SBA released today. We reviewed this case and PPM requested a PPP loan Pilot.com, Inc. in which Index Ventures VIII LP is an investor. ”

“We can confirm that not one of the Index Ventures foundation organizations has applied for a PPP loan from Radius Bank. We are working with the SBA to update their report, ”said Barrett.

On Monday, Bird refused to submit an application or receive a loan under PPP, despite the fact that the SBA database says that they were approved to receive a loan in the amount of from 5 to 10 million dollars.

Travis Vander Zanden, the company’s founder, suggested in his last Twitter post that the mistake could have been the result of an early discussion with a Citibank lender about applying for PPP funds.

“Bird initially spoke with Citi, but decided not to apply for PPP, as the money was more deserved for small and local businesses. Citi will confirm this. Not sure how we made the PPP list, but we are investigating. ” VanderZanden tweeted.

“It seems that Citi launched the application while they were waiting for our decision on whether to file an official application. We had an internal discussion and told Citi that we did not want to submit an application by e-mail on April 23, ”he wrote. “They confirmed that the interim application was canceled that evening and was never served.”

A representative of Foundation Capital, another venture capital firm listed in the database as approved for a PPP loan of between $ 1 and $ 2 million, said in a statement to CNBC: “Fund Capital has not filed and has not received a PPP loan.”

“We do not know how the error occurred, but now we are working to try to figure it out and fix it. Let us know if we find out how this happened, ”the representative said.

– Additional reporting from CNBC Ari levy

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