Secret Service recovers $286M in stolen pandemic loans
The U.S. Secret Service said Friday that it has recovered $286 million in fraudulently obtained pandemic loans and is returning the money to the Small Business Administration. The Secret Service said an investigation initiated by its Orlando office found that alleged conspirators submitted Economic Injury Disaster Loan applications by using fake or stolen employment and personal information and used an online bank, Green Dot, to conceal and move their criminal proceeds. The agency worked with Green Dot to identify roughly 15,000 accounts and seize $286 million connected to the accounts.news.yahoo.com
Father and Son Convicted of $1.7 Million COVID-19 Relief Fraud
After obtaining the fraudulent loan proceeds, the defendants engaged in unlawful monetary transactions with the proceeds of the scheme, including making $30,000 payments to family members. Izzat Freitekh was convicted of one count of conspiracy to commit money laundering, three counts of money laundering, and one count of making false statements. He faces up to 10 years in prison for conspiracy to commit money laundering, 10 years in prison for each of the money laundering counts, and five years in prison for the false statements count. Tarik Freitekh was convicted of one count of conspiracy to commit wire fraud, one count of bank fraud, one count of conspiracy to commit money laundering, one count of money laundering, and one count of falsifying and concealing material facts. He faces up to 30 years in prison for the bank fraud count, 20 years in prison for the wire fraud and money laundering conspiracies, 10 years in prison for the money laundering count, and five years in prison for the falsifying material facts count.justice.gov
Four Executives Sentenced for SBA Fraud Scheme Spanning 13 Years
One additional co-conspirator, Nicole Smith, 44, of Indianapolis, is scheduled to be sentenced on Jan. 7, 2022. These defendants were convicted following a two-week jury trial in the U.S. District Court for the Southern District of Indiana for the defendants. Agee, Isley, Griffin, and Nicole Smith were each convicted of one count of conspiracy to commit wire fraud affecting a financial institution. “Fraud against SBA loan programs directly harms taxpayers and undermines the public’s faith in in important community programs.” said Assistant Attorney General Kenneth A. “OIG remains committed to rooting out bad actors and protecting the integrity of SBA programs every day.justice.gov
Two Florida Men Plead Guilty to $35 Million COVID-19 Relief Fraud Scheme
Augustin and Stote obtained a fraudulent PPP loan for Augustin’s company, Clear Vision Music Group LLC, using falsified documents. Stote and Augustin recruited additional PPP loan applicants and prepared and submitted fraudulent loan applications for them in exchange for a share of the loan proceeds. They submitted or facilitated at least 79 fraudulent loan applications worth at least $35 million and planned to submit more. “Fraud against PPP programs directly harms taxpayers and undermine public trust in essential government support during the pandemic. “Theft of government funds will not be tolerated, and prosecuting PPP fraud remains a priority for law enforcement.”Stote and Augustin each pleaded guilty to conspiracy to commit wire fraud.justice.gov
Texas Woman Convicted of COVID-19 Relief Fraud
Through these loan applications, Kasali sought over $3.8 million in PPP loan funds. Kasali falsely represented the number of employees and payroll expenses in each of the PPP loan applications. Kasali ultimately received over $1.9 million in PPP loan funds. Kasali was convicted of two counts of making false statements to a financial institution and two counts of bank fraud. The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP.justice.gov
Texas Man Sentenced to More Than Nine Years in COVID-19 Fraud and Money Laundering Scheme
Through these loan applications, Price sought over $2.6 million and actually obtained over $1.6 million in PPP loan funds. Price falsely represented the number of employees and payroll expenses in each of the PPP loan applications. To support the fraudulent PPP loan applications, Price also submitted fraudulent tax records and other materials. Illustratively, with respect to the 713 Construction LLC loan application, Price applied in the name of an individual who died shortly before the application was submitted. Assistant Attorney General Kenneth A.justice.gov
Florida Tax Preparer Charged in Connection with $7 Million Loan Fraud Scheme
A Florida tax preparer was charged in an indictment filed in the Eastern District of Pennsylvania yesterday with scheming to fraudulently obtain more than $7 million in Paycheck Protection Program (PPP) loans, Economic Injury Disaster Loans (EIDL) and pre-pandemic Small Business Administration (SBA) loans, and to launder the proceeds of the illegal scheme. Osborne also provided a “script” to scheme participants to use in calls with lenders. Osborne and the California co-conspirators allegedly obtained over $7.3 million in PPP, EIDL, and SBA loans. Osborne is charged with conspiracy to commit wire and bank fraud, wire fraud, bank fraud, and conspiracy to commit money laundering. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Jennifer Arbittier Williams for the Eastern District of Pennsylvania; Special Agent in Charge Amaleka McCall-Brathwaite of the Small Business Association Office of Inspector General (SBA-OIG) Eastern Region; Special Agent in Charge Yury Kruty of IRS-Criminal Investigation (IRS-CI) Philadelphia Field Office; Special Agent in Charge Brian Michael of Homeland Security Investigations (HSI) Philadelphia Field Office; and Acting Assistant Director Jay Greenberg of the FBI's Criminal Investigative Division made the announcementThis case was investigated by the SBA-OIG, IRS-CI, HSI’s Philadelphia Field Office, and the FBI’s Philadelphia Field Office.justice.gov
Four Executives Plead Guilty to Fraud Scheme that Caused Over $4.5 Million in Losses to the Small Business Administration
They did so by, among other things, altering loan payment histories, renaming businesses, and hiding the fact that borrowers had previously defaulted on loans. In all, the defendants attempted to obtain guarantees on over $14 million in loans, were successful in obtaining guarantees on over $9 million in loans, and caused the SBA losses of over $4.5 million. All four defendants pleaded guilty to conspiracy to commit wire fraud affecting a financial institution. McLaughlin pleaded guilty on Sept. 20; Erpelding on Sept. 21; Henson on Nov. 9; and Slater on Nov. 18. Trial Attorney Siji Moore of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Adam Kerndt of the Southern District of Iowa are prosecuting the case.justice.gov
Two Men Plead Guilty in Multimillion-Dollar COVID-19 Relief Scheme
Azeemuddin and Malik also conspired to and did launder over $3 million in PPP loan funds through Azeemuddin’s business, Fascare International Inc., dba Almeda Discount Store (Almeda). As part of the scheme, Azeemuddin instructed Malik to fill out blank checks from companies that received PPP loans by putting the names of fake employees in the payee line. Azeemuddin pleaded guilty to one count of conspiracy to commit wire fraud and one count of money laundering. Malik pleaded guilty to one count of conspiracy to commit wire fraud and money laundering. Attorneys Rodolfo Ramirez and Kristine Rollinson of the Southern District of Texas are prosecuting the case.justice.gov
Florida Man Pleads Guilty to Federal Charges for Fraudulently Obtaining and Laundering More than $4 Million in Paycheck Protection Program Loans
In these fraudulent applications, Blotnick falsified various information, including the number of his employees, the federal tax returns for his businesses, and payroll documentation. Blotnick sought more than $6.8 million in total PPP loans and obtained more than $4.6 million. Blotnick pleaded guilty to one count of wire fraud and one count of money laundering. A federal district court judge will determine any sentence after considering the U.S. Since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases.justice.gov
Explore updated SBA data on businesses that received PPP loans
The Small Business Administration has released additional data about loans under the Paycheck Protection Program, complying with a federal court order as part of a lawsuit by The Washington Post and other media organizations.washingtonpost.com
Texas Man Pleads Guilty to Federal Charges for Fraudulently Obtaining Over $1.6 Million in Paycheck Protection Program Loans
A Texas man pleaded guilty today in the Southern District of Texas to fraudulently obtaining more than $1.6 million in Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief and Economic Security (CARES) Act. The 713 Construction LLC PPP loan application was made in the name of an individual who died shortly before the application was submitted. Through these two PPP loan applications, Price sought and obtained over $1.6 million in PPP loan funds. Price falsely represented the number of employees and payroll expenses in each of the PPP loan applications. Assistant Attorney General Kenneth A.justice.gov
Michigan Man Sentenced for COVID-19 Relief Fraud
Michael Bischoff, 60, of Macomb County, pleaded guilty to bank fraud on Nov. 23, 2020, in the Eastern District of Michigan. In total, Bischoff fraudulently sought approximately $931,000 in COVID-19 relief funds and received approximately $593,590. Assistant Attorney General Kenneth A. Since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.justice.gov
Man Pleads Guilty to Fraudulently Obtaining Approximately $9 Million in COVID-Relief Loans, Some of Which Was Gambled Away
In the course of the scheme, Marnell obtained seven PPP loans totaling just under $9 million from financial institutions for corporations he controlled. To obtain the loans, Marnell submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ business operations and payroll expenses. Once the loans were funded, Marnell transferred millions of dollars from the fraudulently obtained loan proceeds to his brokerage accounts to make risky stock market bets. Marnell also spent hundreds of thousands of dollars in fraudulently obtained loan proceeds at various gambling establishments. The Federal Housing Finance Agency’s Office of Inspector General, the FBI, the Federal Deposit Insurance Corporation’s Office of Inspector General, IRS-Criminal Investigation, the Treasury Inspector General for Tax Administration, and the Small Business Administration’s Office of Inspector General investigated this case.justice.gov
Washington Tech Executive Sentenced for Covid-19 Relief Fraud Scheme
According to court documents, Mohan sought more than $5.5 million through eight fraudulent disaster loan applications. In support of the fraudulent loan applications, Mohan submitted fake and altered documents, including fake federal tax filings and altered incorporation documents. In support of Mahenjo’s loan application, Mohan submitted false incorporation documents and tax forms suggesting that the company had been in business prior to 2020. Five of Mohan’s eight fraudulent loan applications were approved, and he fraudulently obtained nearly $1.8 million in COVID-19 relief funds. Assistant Attorney General Kenneth A.justice.gov
Georgia Woman Pleads Guilty to Bank Fraud For COVID-Relief Fraud Scheme
Through the six PPP loan applications, VanPelt fraudulently sought more than $7.9 million in PPP loan funds, of which more than $6 million was disbursed to accounts controlled by VanPelt. VanPelt falsely represented the number of employees and payroll expenses in each of the six PPP loan applications. To support the fraudulent PPP loan applications, VanPelt submitted fraudulent tax records, bank statements, and payroll reports. VanPelt, who legally changed her name from Ellen Corkrum to Hunter VanPelt in July 2016, submitted three of the PPP loan applications using the VanPelt name and three additional PPP loan applications using the Corkrum name. An additional $1.6 million of the disbursed PPP funds were seized by a bank and returned to the lender.justice.gov
Man Sentenced for Covid-19 Relief Fraud Scheme
In support of the fraudulent PPP loan applications, Hsu submitted fake federal tax filings. Six of Hsu’s nine fraudulent loan applications were approved, and he fraudulently obtained more than $700,000 in COVID-19 relief funds. Assistant Attorney General Kenneth A. This case was investigated by the TIGTA, SSA – Office of Inspector General (OIG), SBA – OIG, and HSI. In May, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.justice.gov
Jury Convicts Five Former Officers and Employees of Banc-Serv Partners in $5 Million Scheme to Defraud the Small Business Administration
Agee was convicted of one count of conspiracy to commit wire fraud affecting a financial institution and four counts of wire fraud affecting a financial institution. Isley was convicted of one count of conspiracy to commit wire fraud affecting a financial institution and two counts of wire fraud affecting a financial institution. Nicole Smith was convicted of one count of conspiracy to commit wire fraud affecting a financial institution and two counts of wire fraud affecting a financial institution. Griffin was convicted of one count of conspiracy to commit wire fraud affecting a financial institution. The defendants convicted of conspiracy or fraud affecting a financial institution face a maximum sentence of 30 years in prison per count.justice.gov
Man Sentenced for His Role in COVID-19 Relief Fraud Scheme
Trial Attorneys Laura Connelly and Leslie S. Garthwaite of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen Ingraham of the Eastern District of Wisconsin are prosecuting the case. The Fraud Section leads the department’s prosecution of fraud schemes that exploit the PPP. In the months since the PPP began, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases. In May, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.justice.gov
Owner of Wedding Planning Company Pleads Guilty to COVID-19 Relief Fraud
In the second application, Shah sought over $1.5 million in PPP loan proceeds by fraudulently claiming that WBF had 126 employees with an average monthly payroll of over $600,000. In connection with both PPP loan applications, Shah submitted fraudulent Employer’s Quarterly Federal Tax Return (IRS Form 941) documents for 2019. Shah admitted that he obtained over $1.5 million in PPP loan proceeds. PPP loan proceeds must be used by businesses on payroll costs, interest on mortgages, rent, and utilities. In the months since the CARES Act passed, Fraud Section attorneys have prosecuted more than 100 defendants in more than 70 criminal cases.justice.gov
Miami man who bought Lamborghini with COVID-19 relief money sentenced to six years
A Miami businessman was sentenced to more than six years in prison Wednesday after pleading guilty to fleecing millions from a federal COVID-19 relief program and buying luxury items with the money, including a $318,000 Lamborghini Huracán Evo.news.yahoo.com
Senate votes to extend small biz loan program for 2 months
WASHINGTON – The Senate passed a bill 92-7 on Thursday to extend the deadline for business owners to apply for forgivable loans through the Paycheck Protection Program, giving applicants two more months to apply for federal aid. The bill had already passed the House, so it now goes to President Joe Biden’s desk to be signed into law. Congress started the loan program last year to help businesses survive the COVID-19 pandemic. Business groups lobbied lawmakers to keep the program going to help ensure businesses that still need help can get it. The Small Business Administration reports that it has approved nearly 7.9 million loans totaling about $704 billion.
Senate confirms Isabel Guzman to lead small biz agency
(AP Photo/Alex Brandon)WASHINGTON – The Senate on Tuesday overwhelmingly approved President Joe Biden's pick to oversee the Small Business Administration, an agency that has seen its portfolio expand in response to the coronavirus pandemic. Guzman is a former Obama administration SBA official who currently heads California’s Office of the Small Business Advocate. In that role, she oversaw efforts to help that state’s small businesses survive the pandemic. The Small Business Administration oversees loan programs to help businesses recover from natural disasters, enhances access to capital through loan guarantees and provides training and technical assistance. Guzman said she would work to ensure money gets into the hands of the small businesses hurt the most by the pandemic and the economic crisis through no fault of their own.
Did you get billed for an SBA loan you didn’t apply for? Here’s what to do
Did you get a bill for a Small Business Administration (SBA) loan, but you didn’t apply for one? It’s possible that an identity thief applied for the loan using your personal or business information. The SBA has new guidance about reporting the fraud, and the FTC has tips to help you clear up any credit problems it may cause. The SBA’s Office of Disaster Assistance has been issuing the loans under its COVID-19 Economic Injury Disaster Loan (EIDL) program. Keep these invoices until the SBA has finished reviewing your identity theft report.
More coronavirus relief on the way for small businesses
(AP Photo/Jae C. Hong, file)NEW YORK – For Nancy Sinoway, a second coronavirus relief loan would increase the chances that her dressmaking business will survive. The SBA will initially accept only applications submitted by community financial institutions, or CFIs, lenders whose customers are minority-owned and economically disadvantaged businesses. Starting Monday, applications for first-time borrowers submitted by these lenders will be accepted, followed by applications for second loans on Wednesday. As with the first two rounds of the PPP, applications must be submitted online at banks and other SBA-approved lenders. The PPP loan Sheets got in the spring helped tide him over.
Minority-owned companies waited months for loans, data shows
Congress has approved a third, $284 billion round of PPP loans. The recent data from the SBA provided a more in-depth look at businesses that received loans than data released on July 6. The AP and other news organizations successfully sued under the Freedom of Information Act to make data on all PPP loans public, leading to the latest release. The SBA did not address the timing of loans to minority-owned businesses when asked for comment by the AP. MBE Capital, a lender focusing on minority-owned companies, received a commitment in mid-May from NBA Hall of Fame member Magic Johnson for funding for $100 million in PPP loans.
Jacksonville dry cleaner holds out hope for more federal aid
JACKSONVILLE, Fla. – Martinizing Dry Cleaning has opened its doors to the Jacksonville community for the last 18 years. “I wake up every morning my heart is pounding wondering is this going to be another day I stay in business or not." The only reason Olson says her doors are open right now is because of federal funding she received from the Paycheck Protection Program. She asked how another round of PPP funding would be used if Olson received it. Olson recently received an economic injury disaster loan that she will eventually have to pay back.
GOP pushes for answers in Florida Democrats’ PPP loan
TALLAHASSEE, Fla. – Despite repeated calls from news organizations and the GOP, the Florida Democratic Party has so far refused to release its Payroll Protection Program loan application. Political parties were supposed to be excluded from the PPP loan program, but somehow Democrats got at least $780,000. Now, the GOP is calling for the Small Business Administration to release that information. In documents, Democrats show repaying the money to a different bank than the one that issued the loan. We also asked the Florida Democratic Party why it isn’t releasing the application, but we’ve yet to hear back from them.
Size mattered: Big companies got coronavirus loans first
The PPP made very low-interest loans available to any business -- or any franchisee of a business -- with under 500 employees. It was not designed for very small businesses.Its not clear how many small companies have failed because of the pandemic. The data released by the SBA July 6 does show that by June 30, 85% of the PPP loans had been for less than $150,000. Among other big banks, nearly 18% of the 1,185 loans TD Bank made the first week were over $1 million, as were 13% of Truists 7,143 loans. But it may have been too late for who knows how many small businesses, said Karen Kerrigan, president of the advocacy group Small Business & Entrepreneurship Council.
Heres the businesses that received federal loans through the Paycheck Protection Program
JACKSONVILLE, Fla. New data released Monday by the Small Business Administration shows about 14,000 Jacksonville-based companies received federal loans through the Paycheck Protection Program, or PPP. Data shows 12,000 businesses received loans of less than $150,000, but several dozen were granted millions. The businesses that received $5-10 million includes Nextran Corp., Physicians Group Services, Stein Mart Inc., Vesta Property Services Inc, and others. In the $2-5 million dollar range include Celebration Church of Jacksonville, Farah and Farah, The Bolles School, Morgan and Morgan, and the Jacksonville Zoological Society. Dozens of restaurants were granted loans in the $150,000-$1 million range including, Firehouse Restaurant Group, Cowford Chophouse, Bonos of America, and Black Sheep.
House demands coronavirus loan info from Treasury, banks
WASHINGTON A House subcommittee investigating billions of dollars in coronavirus aid is demanding that the Treasury Department, the Small Business Administration and several large banks turn over detailed information about which businesses applied for and received federal loans. The letters ask the banks and the department for a complete list of applicants for loans, whether they were approved and also details on the guidance Treasury has issued. Democrats say they are not receiving enough information about the loan disbursements and fear the Treasury Department has favored large, well-funded companies over smaller businesses in underserved communities. The agency has only provided general information, such as the total amounts of loans awarded in a given time period. The loans can be forgiven if businesses use the money to keep employees on payroll or rehire workers who have been laid off.
Treasury chief refusing to disclose recipients of virus aid
(Al Drago/Pool via AP)WASHINGTON Building ramparts of secrecy around a $600 billion-plus coronavirus aid program for small businesses, Treasury Secretary Steven Mnuchin has moved from delay to denial in refusing outright to disclose the recipients of taxpayer-funded loans. We believe that thats proprietary information, and in many cases, for sole proprietors and small businesses, is confidential information, Mnuchin said during the hearing by the Senate Small Business Committee. Mnuchin promised in his testimony to give the GAO access to the PPP loan data. Mnuchin's pledge to give the GAO's auditors access to the PPP loan data appeared to satisfy some senators, who didnt press him on public release of the information. Praise for the small-business loan program flowed to Mnuchin and Carranza at the hearing from senators from both parties, who cited the positive economic impact across the country.
Treasury chief refusing to disclose recipients of virus aid
(Al Drago/Pool via AP)WASHINGTON Building ramparts of secrecy around a $600 billion-plus coronavirus aid program for small businesses, Treasury Secretary Steven Mnuchin has moved from delay to denial in refusing outright to disclose the recipients of taxpayer-funded loans. About 10 weeks after the program was launched, the SBA says it has processed 4.5 million loans worth $511 billion. While the SBA administers the program, Mnuchins Treasury Department has ultimate control over it. We believe that thats proprietary information, and in many cases, for sole proprietors and small businesses, is confidential information, Mnuchin said during the hearing by the Senate Small Business Committee. Praise for the small-business loan program flowed to Mnuchin and Carranza at the hearing from senators from both parties, who cited the positive economic impact across the country.
SBA leaves businesses still hoping for more leeway on loans
NEW YORK – Small businesses hoping for more leeway in using coronavirus loan money were disappointed as the government released instructions for seeking forgiveness for the loans. According to the instructions, loans can still be forgiven in full only if the money is spent within eight weeks of receiving it. Many small businesses say the eight-week period is too restrictive; loan forgiveness applies only for money spent through June 30. Loan forgiveness was a key factor in many owners seeking the loans. While technically they can do that, they could not get forgiveness on the money spent for unapproved items.
Who got what? Details scant on small-business relief effort
WASHINGTON A small, overlooked federal agency is shouldering a massive relief effort for the nations small businesses and their workers left reeling by the pandemic. The need for a detailed public accounting of the small-business relief program is amplified by controversy over how it has unfolded since early April. The agency recognizes the need to balance the interests of transparency with the privacy and confidentiality issues release of loan information raises." The SBA did not make the information public. Under the program, companies are required to use the funds exclusively for employee salaries.
Unforgivable? Restaurants fear loans won't bring relief
She needs to use some of the loan money to pay those expenses. Many restaurants fear for their survival, according to a study released in April by the National Bureau of Economic Research. Restaurant owners may be getting some help from Congress. The House bill would allow business owners to use their loan money for whatever bills they need to cover. The Democratic bill would also give business owners more time to repay their loan amounts that aren’t forgiven, a minimum of five years.
SBA opens 2nd round of Paycheck Protection Program applications
JACKSONVILLE, Fla. – Another $310 billion is being added to the federal government’s Paycheck Protection Program so that lenders can offer more forgivable loans to small businesses. The second round of money is expected to go quickly. Bank of America reports they have $50 billion worth of applications ready to go through the second round. For example, BlueVine, Centerstone SBA Lending, Funding Circle, even PayPal are all accepting applications for PPP loans. On the SBA website, there is a page dedicated to showing you SBA-approved PPP lenders just by entering your ZIP code.
Lakers return $4.6 million from stimulus loan program
LOS ANGELES – The Los Angeles Lakers have repaid a loan of roughly $4.6 million from coronavirus business relief funds after learning the program had been depleted. The Lakers applied for the loan under the Small Business Administration’s Paycheck Protection Program, a part of the federal government's $2.2 trillion stimulus package. “The Lakers qualified for and received a loan under the Payroll Protection Program,” the statement read. The Lakers remain completely committed to supporting both our employees and our community.”ESPN first reported the Lakers’ decision. The Treasury Department issued further guidance for the loan program last week, asking companies not to apply for the funds if they don't need the cash to survive.
Orange Park business gets help from Paycheck Protection Program before funds run out
ORANGE PARK, Fla. – The Small Business Administration said Thursday that it reached the $349 billion lending limit for the Paycheck Protection Program. Nearly 1.7 million loans were approved for small businesses, including Poochie’s Park in Orange Park. Poochie’s Park, like many other small businesses, had to make changes amid the coronavirus pandemic, such as cutting employee hours. He found out Wednesday they could bring back their 24 full-time employees, like Kristi Cessna, and continue to pay them. For the money to run out so fast, it shows just how great the need has been for small businesses.
Government loans start flowing to small businesses
NEW YORK – The flow of money to small businesses under the government's $349 billion coronavirus relief plan is picking up momentum although many company owners are still waiting and wondering. The Small Business Administration reported Monday that more than 959,000 applications had been approved for over $232 billion from the Paycheck Protection loan program. The money Amy Power received Friday evening will go toward paying the eight staffers of her Dallas-based public relations company. Because the coronavirus has devastated the economy as a whole, some owners don’t feel that the loan money would guarantee their companies’ survival. Julie Goldman got her loan money Monday.
Small business owners desperate for help told to be patient
JACKSONVILLE, Fla. – Desperate small business owners who hoped for a quick government lifeline to help them survive the coronavirus crisis are still without funds, instead are battling red tape, wary banks and swamped computer systems. Under this loan program, businesses with up to 1,500 employees can receive up to a $2 million, long-term loan. Thousands of others who sought relief through Small Business Administration economic injury disaster loans have waited even longer — some since mid-March. “These systems are not built for massive volumes,” said Karen Kerrigan, president of the advocacy group Small Business & Entrepreneurship Council. Small business owners have also found the economic injury disaster loans problematic.
Small business relief program launches, hits snags
Many small business owners ran into bureaucratic or technological road blocks. A major trade group for small businesses complained that too many of its members were “shut out” from getting loans. Bank of America alone said 75,000 small businesses had applied for $7 billion of loans. Bank of America, for example, said the loans were available to customers who had business deposit accounts and business loans with the bank. “Small business owners have had their applications filled out.
Urgent question from small businesses: When will aid arrive?
That's the urgent question for small business owners who have been devastated by the coronavirus outbreak. “Relief can’t come soon enough — we’re a cash business with small margins," says Rammel, who is looking to Small Business Administration loans. The rescue package signed into law Friday provides for Small Business Administration loans to companies as well as to sole proprietors and freelancers. And the Federal Reserve plans to set up a program to lend directly to small business owners. On its face, the rescue aid appears to address some of the most vital needs of small businesses, notably their ability to maintain or hire back furloughed workers eventually.