WASHINGTON: A technical snafu in a U.S. government system caused many small businesses to receive loans twice or more under a federal aid program to help businesses hurt by the COVID-19 pandemic, nearly a dozen people with knowledge of the matter said.
Information provided by the sources, which include industry executives and borrowers, as well as Reddit posts, suggest at least 1,020 duplicate deposits were issued. While that is a tiny fraction of funds disbursed under the huge program, it could amount to roughly US$116 million dollars based on average loan sizes.
"The SBA inadvertently issued duplicate loan approvals to some small businesses. It is our impression that the majority of these borrowers are...honest small business owners who had applied for a PPP loan through multiple lenders," a spokeswoman for BlueVine said in an email, adding"multiple" lenders were affected.
"We have seen a small number of duplicate applications funded through the SBA Paycheck Protection Program, despite the administration’s guidance that applicants not apply more than once for a loan," said a spokesman for PayPal, which partnered with a bank to fund the loans. He added PayPal was working with the SBA and borrowers to resolve the issue.The PPP was launched hurriedly on April 3 as the government rushed to get cash to millions of desperate borrowers.
"The SBA has asked lenders to review duplicate loans based on a list they provided and work with any other lenders that may have extended funds to get one of the parties to cancel," the BlueVine spokeswoman said.