It was successful, by almost everyone’s opinion, but left journalists across the country perplexed when they found out the data, released this month, riddled with errors.
Some loans have been overestimated by millions – including a South Bay company whose $ 66,000 loan was somehow listed between $ 5 million and $ 10 million, according to this focus group – while some were counted twice.
That’s what happened with a Long Beach company, Tristar Risk Management, which received a $ 7 million loan, President Tom Veale said. It’s precisely listed in the data – right next to its own parent company, which is also said to have received between $ 5 million and $ 10 million.
But Veale said his company received a loan, not the two listed.
The goal of the program was to keep jobs, and each loan in the database shows how many jobs would have been saved. But even this data seems to be wrong.
Canoo Inc., a Torrance-based electric vehicle startup, received between $ 5 million and $ 10 million, according to data.
Under the guidance of the company’s lawyers, Canoo spokesperson Veronica Shea has not confirmed whether the company has received the loan. But she said Canoo had a workforce of 300 that they were able to retain throughout the coronavirus lockdown.
That’s not what the database says, however. It shows zero jobs retained.
This newsgroup is far from the only one to find errors like these.
Reporters for the Washington Post spoke to the bankers who said employment figures for hundreds of companies had been incorrectly reported by the US Small Business Administration, which administers the PPP.
In several cases, according to the Post, the data showed more than 500 jobs held by multiple companies, but each business owner said the actual number was closer to two dozen or fewer employees.
Another national point of sale, Axios, found companies listed in the data that had not even applied for a loan, like Bird Scooters, whose owners said they canceled their loan application.
The list goes on and on, of Restaurants in Pasadena Manhattan Beach interior designers: the data is riddled with errors.
That’s not to say that loans haven’t saved businesses and jobs. All of the business owners and bankers contacted by this focus group said the loans helped them stay afloat after the pandemic restrictions brought businesses to a standstill.
But calculating exactly how much it helped – how many businesses he started, how many jobs were saved, even how much money was distributed – is hard to list precisely.
In Los Angeles County alone, PPP injected between $ 16.2 billion and $ 19.4 billion into the local economy, according to this focus group’s analysis. This saved 1.67 million jobs, according to the data.
But the accuracy of these numbers is unclear. Analyzing nationwide PPP data, the Washington Post found that the number of jobs reportedly saved in specific industries exceeded the number of jobs that existed in 2019.
For example, in the field of landscape architecture, 114,000 jobs would have been saved, notes the Post. But that’s more than three times as many people who worked in the industry last year, according to figures from the Ministry of Labor.
The 1.67 million jobs retained in Los Angeles County would account for about 42% of all non-government and non-farm jobs in the county, if the data were correct.
While neither the SBA nor the US Treasury, which funds PPP, responded to the emails, an anonymous Treasury spokesperson blamed the job errors on the banks that processed the loans, the Post reported.
Some banks, on the other hand, blamed the federal government.
Asked about the $ 143,000 loan from a Pasadena restaurant, erroneously reported by the federal government to be in the range of $ 5-10 million, Leslie Rinaldi, general counsel for Celtic Bank Corp., based in the ‘Utah said the federal data was in error.
When the same thing happened to a Manhattan Beach interior designer – whose $ 66,000 loan was also falsely classified between $ 5 million and $ 10 million – Stacey Divine, marketing director of Idaho First Bank, said stated that the bank was not mistaken about the amount of the loan.
“If I’m her (the interior designer), I’m going after the government,” Divine said.
Yet other bankers believed it was possible that mistakes had been made on their end.
Keith Sultemeier, president and CEO of Manhattan Beach-based Kinecta Federal Credit Union, said officials found no reported errors among the 1,200 loans they distributed – the vast majority less than 100 $ 000. Still, he noted that it was a stressful few months when loan applications started pouring in.
While the bankers processed the requests, they were forced to enter the data manually into the SBA’s system, he said.
“It’s someone who takes the numbers out of the documentation and hooks them up to the system,” Sultemeier said in an interview on Friday. “Anytime you have a manual process like this, it’s going to cause problems. You are going to have errors. They shouldn’t be very frequent, but you are going to have them.
After two weeks of manual data entry, the Sultemeier team found a way to automate the process.
“Then the SBA came out and said we couldn’t use it, and I understand why,” he said. “The big banks were using it and flooding the system all at once, which meant the smaller ones would have issues with response times.”
However, these are not the only issues that worry Sultemeier. He also suspects that there has been fraud in the system. He noticed it in a dozen accounts since frozen and under investigation.
These are mostly personal accounts that receive loans from foreign banks, he said, and almost immediately after the loan is deposited, the customer withdraws the money.
A similar incident was discovered by the FBI in Los Angeles this week, as a local man was arrested for suspected fraud after receiving $ 8.5 million in PPP loans.
Yet despite these problems, Sultemeier agrees with the companies: the program was worth it.
“It was definitely a lifeline for a lot of the small businesses that we serve,” especially considering how quickly the program was put in place, he said.
The problems that journalists discovered “could have been worse,” he added. “Maybe it was worse, and we’ll find out as the data comes out, but it put money in the hands of the people who needed it.”