Politics

Small business coronavirus relief loan database contains some big errors, firms say

Key Points
  • Several companies that purportedly received forgiveable loans as part of a governnment program aimed at helping small businesses said that they did not apply for — much less get — the funds that are detailed in a database of loans.
  • The venture capital firms Index Ventures and Foundation Capital, along with the scooter company Bird, said that they did not apply for the Payroll Protection Program, despite being listed in the database as having been approved for millions of dollars of funds from banks under that federally run program.
  • A Wisconsin woman was incorrectly listed as having been approved for a loan worth up to $10 million. "How did that happen?" she asked when CNBC contacted her.

In this article

Geraldine Brimley
Source: Geraldine Brimley

They can't show you the money because they didn't get it — despite what the government says.

Several companies that purportedly received forgivable loans as part of a federal relief program said that they did not apply for — much less get — the funds that are detailed in a database of loans released Monday.

That database includes information about the lion's share of $521 billion so far approved under the Paycheck Protection Program, which is aimed at helping small businesses affected by the coronavirus pandemic.

The data released Monday reflects the more than 661,000 firms that were approved for at least $150,000 in loans under the program. While that tally is just a small fraction of the nearly 5 million companies that were approved for PPP funds – most were approved for under $150,000 – it is large enough to potentially contain a variety of data errors.

The venture capital firms Index Ventures and Foundation Capital, along with the scooter company Bird, said that they did not apply for PPP funds, despite being listed in the database as having been approved for millions of dollars of funds from banks under that federally run program.

And a woman who lives in the Milwaukee area told CNBC she was surprised to be listed in the database released by the Small Business Administration as having been approved for a loan ranging from $5 million to $10 million.

The woman, 72-year-old Geraldine Brimley, had applied for a PPP loan of about $9,300 through Radius Bank and received a little less $2,300. She runs a small company that delivers mail to rural customers of the U.S. Postal Service.

"How did that happen?" asked Brimley when told that her name was listed as having been approved for a loan of $5 million or more. "How do they make a mistake like that?"

"I could use it," she quipped, referring to the large amount of money that she did not actually get.

Kathleen Barrett, a spokeswoman for Radius Bank, said that when Brimley or someone acting on her behalf applied online for the loan, extra "zeros" were accidentally input in one section of the application, making it seem like she had asked for $9 million.

Barrett said that Radius, when it looked at the application, saw from the paperwork that Brimley submitted that she was only actually seeking $9,000, and that the bank fixed the mistake referring to the higher amount before processing the loan.

Barrett said that while the SBA's database that was publicly released Monday contains an incorrect, much higher range that was approved by the bank, an internal database contains the correct, lower amount that she actually received.

"The reporting on the SBA side appears to be delayed or incorrect," Barrett said.

An SBA spokesman declined to comment to CNBC about Brimley's case, or the ones involving the firms who said they did not get loans.

SBA and Treasury Department release names of largest PPP loan recipients
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SBA and Treasury Department release names of largest PPP loan recipients

The same SBA database shows that Index Ventures was approved for a loan in the range of $2 million to $5 million from Radius Bank.

A spokesman for Index Ventures told CNBC, "I can confirm that Index Ventures VIII did not apply for a PPP loan at any point."

"The entry listed is in error, as although it lists us as a business name, it is not our address or correct information about our fund. Our legal team is looking into why our name is listed and look to correct it ASAP," the spokeswoman said.

Asked about the Index Ventures loan, Radius' Barrett said, "We have noticed that there have been clerical errors in the reports that the SBA made public today. We have looked into this instance and the PPP loan was requested by a company called Pilot.com, Inc. in which Index Ventures VIII LP is an investor."

"We can confirm that none of the Index Ventures fund entities have applied for a PPP loan from Radius Bank. We are working with the SBA to make the updates to their report," Barrett said.ᐧ

Bird, in a tweet Monday, denied applying for or getting a PPP loan, despite the SBA database saying they were approved for a loan of between $5 million and $10 million.

Tweet

Company founder Travis VanderZanden, in a later Twitter post, suggested the mistake might have resulted from an early discussion with the lender Citibank about applying for the PPP funds.

"Bird spoke with Citi early on, but decided not to apply for PPP b/c the money was more deserved by small and local businesses. Citi will confirm this. Not sure how we made the PPP list, but we're investigating," VanderZanden wrote on Twitter.

"It looks like Citi started an application while they waited for our decision on whether to formally apply. We discussed internally and told Citi we didn't want to apply via email on April 23rd," he wrote. "They confirmed that the temp app. was cancelled that evening and never submitted."

A spokesperson for Foundation Capital, the other venture capital firm listed in the database as being approved for a PPP loan of between $1 million and $2 million, in a statement to CNBC said, "Foundation Capital neither applied for nor received a PPP loan."

"We don't know how the error occurred, but are working right now to try and sort it out and get it corrected. Will let you know if we learn how this happened," the spokesperson said. 

- Additional reporting by CNBC's Ari Levy