Over 4,000 Businesses Receive Double PPP Loans, Will Have to Pay Them Back
More than 4,000 small businesses in the U.S. accidentally received duplicate coronavirus relief funds last year, which they will be required to return.
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The Paycheck Protection Program was established last year to help struggling small businesses stay afloat during the pandemic. This effort to financially aid businesses was a part of the CARES Act issued on March 27, 2020.
The Inspector General of the Small Business Administration released a report on Monday stating that duplicate loan payments were made to 4,260 borrowers for applications approved between April 3 and Aug. 19, 2020.
The PPP distributed 8,731 duplicate loans across 4,260 borrowers, 2,689 of which had the same tax ID, and 1,571 with the same business address. All known duplicate payments occurred in 2020, according to the SBA report.
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The SBA computer program set up to prevent approving duplicate applications failed, particularly when a borrower applied with multiple lenders, according to Reuters. Issues were noted with some borrowers who applied for one loan using their Social Security number and then applied for a second loan with another lender using their tax identification number.
To fully determine if the disbursements resulted in PPP loans to ineligible borrowers, the SBA must “conduct loan reviews and take immediate action to address potential improper PPP loan disbursements,” stated Monday’s SBA report.
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Small businesses that received duplicate funds will be responsible for repaying the money, according to the report. This might be handled by preventing loan forgiveness on any duplicate business loans. According to the report, the SBA found no evidence of businesses tampering with systems in order to receive duplicate loan funds, but full investigations are still ongoing.
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This article originally appeared on GOBankingRates.com: Over 4,000 Businesses Receive Double PPP Loans, Will Have to Pay Them Back
