Jo had expected a relatively small, six-figure sum to help pay for her handful of staff. As she waited for her loan approval in May, she was suddenly shocked to find that Bank of America had processed and deposited $ 5 million into her account.
“I was scared; we immediately notified the bank,” she said on Friday.
Jo said the multi-million dollar loan turned out to be a clerical error. The bank canceled the funds and then loaned her the exact amount of around $ 100,000, she said. Bank of America declined to comment on Monday.
Congress approved the $ 670 billion paycheck protection program in May to curb soaring unemployment and help small businesses keep their employees on the payroll. The loans are eligible for discount under certain criteria.
But as agencies work to distribute funds quickly, concerns have been raised about the possibility of fraud and errors like the Long Beach problem. A report released last month by the Government Accountability Office noted that the program lacks sufficient safeguards and oversight.
The program has since reopened for another round of applications expected next month, and the U.S. Treasury Department last week released a detailed database of people who have received loans so far.
The Post analyzed a list of small Long Beach businesses that received loans and identified Los Coyotes Pet Hospital as an outlier for receiving $ 5-10 million for a staff of just 10.
In total, more than 700 local businesses have received loans in the range of $ 150,000 to $ 10 million. (The Long Beach Post also requested and received a small business loan of $ 238,395).
The list includes churches, restaurants, law firms, qualified nursing facilities, hotels, and charities. The government only lists a range of money that businesses have received, making it impossible to say how much local businesses have raised from the government.
For example, the Long Beach Aquarium of the Pacific and the local branches of the YMCA and Goodwill have all received loans in the range of $ 2-5 million, while the local restaurant chain Los Compadres has received between $ 1 and $ 2 million. millions of dollars.
Companies that have received loans in the highest range of $ 5 million to $ 10 million include: Daylight Transportation LLC, a trucking company; Mangan Inc., an engineering firm; Obagi Cosmeceuticals, a skin care company; The children’s clinic; WA Rasic Construction Company; Tristar risk management; and the service company Tristar.
Click here to view the Long Beach Post’s database of local small businesses that have received P3 loans.
The CalMatters News Agency lists some interesting trends for small businesses on the California list and noted that there had previously been reports of clerical errors on the government spreadsheet.
6 things to remember about small business loans in California