Small-business owners say their federal Covid loans were wrongly sent to collections

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Lewis Kamb is a national FOIA reporter for NBC News, based in Seattle.

When the Covid pandemic shut down his entertainment booking agency, Sleeping Giant Music, in 2020, Freddie Harb faced financial ruin. With concerts and live events largely on hold, the San Diego businessman said, he turned to the U.S. Small Business Administration in case he needed help making payroll. Like nearly 4 million other small-business owners, he received what’s called an “economic injury disaster loan.

Harb hired Curran to get the loan out of collections and sent back to the SBA, but the agency still hasn’t retrieved the full payment that Harb had set up more than three years earlier, records show. In the meantime, additional interest keeps piling up. In an Oct. 15 email, the SBA acknowledged Harb’s attempts at payment, and instructed him to contact his bank for more information. Harb said his bank told him the SBA has never made an electronic request to withdraw the funds.

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