Veterinarian Dr. Seonah Jo, who runs Los Coyotes Pet Hospital in East Long Beach, was one of many struggling small business owners who applied for a federal Paycheck Protection Program loan to help ease the strain from the coronavirus pandemic.
Jo had expected a relatively small, six-figure sum to help pay her handful of staff. As she was waiting for her loan to be approved in May, she was suddenly shocked to find that Bank of America had processed and deposited $5 million into her account.
“I was scared; we told the bank immediately,” she said Friday.
Jo said the multimillion dollar loan turned out to be a clerical error. The bank rescinded the funds and later loaned her the correct amount of about $100,000, she said. Bank of America declined comment Monday.
Congress in May approved the $670 billion Paycheck Protection Program program to curb skyrocketing unemployment and help small business keep their workers on the payroll. The loans are eligible for forgiveness under certain criteria.
But as agencies work to rapidly dole out the funds, concerns have been raised over the possibility of fraud and errors like the glitch in Long Beach. A report last month from the Government Accountability Office noted that the program lacked sufficient safeguards and oversight.
The program has since reopened for another round of applications due next month, and U.S. Department of Treasury last week released a detailed database of who has received loans thus far.
The Post analyzed a list of Long Beach small businesses who received loans and spotted Los Coyotes Pet Hospital as an outlier for receiving $5 million to $10 million for a staff of just 10.
In all, more than 700 local businesses received loans in the range of $150,000 to $10 million. (The Long Beach Post also applied for and received a small-business loan for $238,395).
The list includes churches, restaurants, law firms, skilled nursing facilities, hotels and charitable organizations. The government only lists a range of money the businesses received, making it impossible to say how much local companies reaped from the government.
For example, the Long Beach Aquarium of the Pacific and local arms of the YMCA and Goodwill all received loans in the $2 million to $5 million range, while local restaurant chain Los Compadres received between $1 million and $2 million.
The businesses that received loans in the highest range of $5 million to $10 million include: Daylight Transportation LLC, a trucking company; Mangan Inc., an engineering firm; Obagi Cosmeceuticals, a skincare company; The Children’s Clinic; W.A. Rasic Construction Company; Tristar Risk Management; and Tristar Service Company.
Click here to view the Long Beach Post’s database on local small businesses that have received PPP loans.
The news organization CalMatters lists some interesting trends for small businesses on the California list and has noted that there have already been reports of clerical errors on the government spreadsheet.
https://calmatters.org/economy/2020/07/california-ppp-loans-6-surprising-takeaways/