SBA releases detailed information on more small business borrowers under pandemic relief effort
WASHINGTON—The Small Business Administration on Tuesday released detailed loan information for millions of borrowers under the Paycheck Protection Program, amid signs of fraud in the federal government’s signature coronavirus relief effort for small businesses.
The disclosure provides the names, addresses and precise loan amounts for each PPP borrower. The SBA had previously issued some detailed information for PPP loans above $150,000, although the bulk of the program’s loans were smaller than that.
U.S. District Judge James Boasberg ordered the release of more information on PPP borrowers, in response to a lawsuit filed by news organizations under the Freedom of Information Act. Plaintiffs included Dow Jones & Co., publisher of The Wall Street Journal.
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The SBA’s inspector general said in October that there were “strong indicators of widespread potential abuse and fraud in the PPP.” The watchdog counted tens of thousands of companies that received PPP loans for which they appear to have been ineligible, such as corporations created after the pandemic began.
The Paycheck Protection Program was a centerpiece of the $2.2 trillion coronavirus relief bill known as the Cares Act, which was approved by Congress in March. Launched the following month, PPP offered forgivable loans to small businesses and nonprofits, independent contractors and self-employed workers and had distributed $525 billion when it closed in August.
Several congressional proposals have called for reopening the program to offer further assistance to ailing businesses amid signs that the economic recovery is cooling as winter approaches. Treasury Secretary Steven Mnuchin, in Senate testimony Tuesday, also called for additional aid for small businesses.
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“SBA’s historically successful COVID relief loan programs have helped millions of small businesses and tens of millions of American workers when they needed it most,” an SBA spokesperson said in a statement about the new disclosures.
The agency had fought the release of additional information on PPP loans, citing concerns over borrowers’ privacy. Those concerns were echoed by some small-business advocacy groups.
The loans, which were issued by financial institutions and backed by the SBA, were a lifeline for firms hit by shutdowns and social-distancing measures during the coronavirus pandemic. The loans are forgivable provided borrowers meet certain criteria, and the SBA has begun processing forgiveness requests.
Judge Boasberg in November ordered the agency to release more information about borrowers from PPP, as well as those from a separate SBA coronavirus relief effort known as the Economic Injury Disaster Loan Program.
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Judge Boasberg originally gave the SBA until Nov. 19 to provide the information, but the SBA requested a stay, which the judge granted temporarily as he considered whether to grant it. Judge Boasberg last week rejected the request and ordered the agency to release the information by Dec. 1.
The public “maintains an urgent and immediate interest in assessing the results of SBA’s initial effort at administering a massive small-business relief package and extracting lessons where possible—both to inform a critical, ongoing federal debate and to remedy failures in the loan-disbursement process moving forward,” Judge Boasberg wrote in the order.
The SBA had previously provided the names and addresses of borrowers whose PPP loans exceeded $150,000 along with their loan range across five categories, from $150,000 to the maximum of $10 million. The agency had also released specific amounts for loans under $150,000, but hadn’t provided the names of the borrowers.