WASHINGTON (Reuters) – US President Donald Trump’s administration this week touted its $ 660 billion small business pandemic assistance package as a “wild success”, revealing data showing the initiative had saved 51 million jobs.

FILE PHOTO: US President Donald Trump signs the Paycheck Protection Program and Improved Healthcare Act’s financial response to the coronavirus disease (COVID-19) outbreak, in the office Oval of the White House in Washington, United States, April 24, 2020. REUTERS / Jonathan Ernst / File Photo

But there were red flags in the colossal data set that suggested some borrowers were overestimating the number of jobs their loan clawed back. That, combined with the fact that several of the named companies dispute that they took out a loan after the government showed otherwise, casts doubt on the accuracy of the figure of 51 million.

For example, a Reuters analysis of the data found that 827 companies said they had saved at least 400 jobs with a loan of less than $ 150,000. Two hundred of these companies reported saving at least 400 jobs with a loan of $ 5,000 or less.

“I’m skeptical of the total number,” said Philip Mattera, director of Washington-based nonprofit Good Jobs First, which focuses on government accountability.

“I guess there wasn’t a lot of rigor in reporting those jobs numbers.”

A senior administration official said the figure of 51 million was an estimate based on preliminary data from lenders and that the actual number of jobs saved will be clearer once borrowers go through the process of canceling loans. ready.

The Paycheck Protection Program, overseen by the Small Business Administration (SBA), allows small businesses with 500 or fewer employees affected by the economic fallout from the pandemic to apply for a government-guaranteed forgivable loan. Data on Monday provided details of nearly 4.9 million loans, including the number of jobs the borrower said the loan had helped him keep.

This data – released jointly by the SBA and the US Treasury Department on Monday – is critical in assessing the success of the program, created by Congress to keep workers on the payroll.

In an effort to get money out quickly, the Treasury and the SBA agreed that borrowers only need to certify in good faith that the information they provided to lenders and the SBA was accurate.

With the exception of a limited review of the documentation, the job retention figures have not been thoroughly verified, according to interviews with bankers and lawyers who have first-hand knowledge of the process.

Speaking to reporters on Monday, senior administration officials scrambled to stress that the onus was on the borrower to provide accurate information.

Mattera said a “telltale” sign that some borrowers may have faked the numbers were the 3,728 companies that said they kept exactly 500 employees.

As businesses were not required to provide job retention estimates to apply for the loan, 878,000 businesses said no jobs were kept or provided a figure, an analysis found. from Reuters. This represents about 18% of all loans.

And Monday’s data only covers loans that have been approved, not loans that have been disbursed, so it’s hard to know how much money actually went into borrowers’ pockets.

Reuters and other media have also identified several borrowers listed in the data, including scooter company Bird Rides Inc. and New York-based Advent Capital Management LLC, who dispute that they applied for or received a PPP loan.

Bird Rides CEO Travis VanderZanden tweeted Monday that his company discussed getting a loan with his bank, but decided not to. Likewise, Advent told Reuters it explored finding a loan but never completed an application. But in the data, their loans are listed as having saved 395 jobs combined.

These discrepancies suggest the data contains shadow loans – loans that were approved by the SBA but were neither disbursed nor canceled by the lender, leaving them to linger in the SBA system, according to people familiar with it. with the process.

“When you have such a long list, there will be a lot of mistakes,” said Mattera.

Reporting by Michelle Pricel; Editing by Tom Lasseter and Stephen Coates


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