PPP Data Raise More Questions Than Answers

PPP Data Raise More Questions Than Answers
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Trump Administration’s Partial Release of PPP Data Leads to Questions on Program’s Integrity

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Q2 2020 hedge fund letters, conferences and more

WASHINGTON, D.C. – After weeks of stonewalling, the Trump administration acquiesced this week and released partial information on certain recipients under the Paycheck Protection Program (PPP), accounting for just 14% of recipients.

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Unfortunately, the error-riddled PPP data that was released raises more questions than it answers on how the program was administered and on the integrity of the program as a whole.

Few Questions About The PPP Data

Here are just a few of the questions that still remain to be answered:

  1. How is the Small Business Administration (SBA) tracking PPP data? Does the SBA know where all the loans are going? Or is it depending on banks to disburse and track the loans?
  • Axios: “There were over 660,000 companies listed. And reporters only called a tiny percentage of them. If the error rate *we* found is representative of the larger sample, then who knows how many PPP loans there really were, or what companies they went to. Imagine if small businesses got shut out of the initial pool, and then shut down or laid off employees, if the initial pool wasn’t actually exhausted?”
  1. Several companies are listed as receiving loans, yet are publicly denying they applied and/or received money. Why are companies erroneously listed? Are there companies that did receive loans that aren’t listed? 
  • Index Ventures claimed, “Earlier today, there was an erroneous entry that Index Ventures applied for a PPP loan. We can confirm that Index Ventures did not apply for a PPP loan at any point. Our legal team is looking into why our name is listed and looking to correct it ASAP.”
  • Foundation Capital insisted, “Foundation neither applied for or took a PPP loan. Not sure how the mistake happened, but we’re trying to get to the bottom of it. It appears other venture firms were also mistakenly listed.”
  • Scooter rental company Bird stated, “Bird was erroneously listed as a company that filed for a PPP Loan. We did not apply for nor did we receive a PPP Loan. We decided as a company not to file an application as we did not want to divert critical funding from small and local businesses."
  1. For the places where there are discrepancies, how are they being resolved?
  • Axios: “There’s going to need to be an audit, and not just the promised reviews of companies that got loans north of $2 million.”
  1. The administration is claiming the PPP saved 51 million jobs — nearly one-third of the entire workforce — a number which is likely inaccurate. Where did this number come from? Is the government overstating the number of jobs saved? 
  • Reuters: “The Bureau of Labor Statistics says there were about 5,000 people employed in the soybean farming industry last year. The Trump administration said the PPP aid program saved 23,000 soybean farming jobs.”
  1. What oversight mechanisms exist for the fees on which banks are cashing in? If a loan is erroneously listed that a bank didn’t actually disburse, did they still receive taxpayer money from SBA?
  • According to recent study, some lenders are set to collect more than $1 billion in assets and could generate fees that surpass their 2019 net revenue before set-asides for loan losses from the PPP.  [S&P Global]
  1. What kind of quality assurance is the SBA conducting? Is it double checking applicants’ eligibility?

The public deserves a full accounting of how hundreds of billions of dollars in PPP funds were spent and an investigation of the Trump administration’s handling to see if any data was included in error, manipulated, or removed.

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