When the USA Handed Out the “Free Money”
EIDL and PPP loans were awarded fast and furious — GAO says they lacked sufficient oversight.
From April 3 until August 8, with funds made available by the CARES Act, the Small Business Administration loaned 690 billion dollars to businesses through the Paycheck Protection Program. The purpose of the loans was to help small businesses keep their employees working.
However, the SBA, no doubt partly because of the need to get the money to employers quickly, approved and wrongly paid out possibly as much as $3 billion.
There were irregularities from the initial applications to the final use of the funds. Many of those who received the loans have since turned the money back in as they learned (or admitted) they were not eligible for the loans in the first place.
The PPP Loans are part of the Care Act, legislation intended to slow the economy’s damage from the coronavirus pandemic. Businesses that received the loans may apply to have their debt forgiven if all proceeds are used for payroll costs, and if all employees are retained and paid as usual.
Economic Injury Disaster Loans (EIDL) sought to help small businesses survive the coronavirus pandemic still operating and providing desperately needed jobs. The EIDL loan recipients were not as restricted as to how they could use the money as were those who obtained PPP loans, which allow payroll costs only.
About 6100 loans went to ineligible businesses.
A report issued earlier this month indicates about 6100 loans have been approved for businesses that are ineligible for the relief.
House Democrats say the outcome of an oversight committee report issued September 1 is that around $3 billion in loan proceeds from the Paycheck Protection Program are suspicious in some way.Republicans brushed off the report, saying $3 billion is just a drop in the bucket compared to over $680 billion distributed through the PPP.
News has been coming out almost since the program’s inception last spring that the loan program was rife with abuse, and additional such reports have…