Loan Cancellation: Online Warning For Pandemic Relief And Tips From 7 On Your Side
That’s great news for the owner of an art auction in Chelsea who called 7 On Your Side for help.
“Now they are excited to help me, Channel 7 has made all the difference,” said David Killen.
For the thousands of small businesses that received federal pandemic loans last summer, it’s time for many to start paying off those loans. They can ask for a forgiveness to write off some of the debt, but the process is not always easy.
In June, art auctioneer David Killen said customers did not come to his Chelsea showroom to buy art.
“They were definitely questioning the point of buying something when they might not be alive in three months,” Killen said.
He applied for and received what is called a Paycheck Protection Program loan through the US Small Business Administration. Over 5,000 small business owners in its Chelsea zip code alone have applied for and received the same type of loan.
“It was a tough time and the money was appreciated,” Killen said.
He was given $ 50,000 to help pay salaries for his staff and to pay other company-related bills.
“It was a godsend,” he said.
A year later, business resumes. And small business owners can now apply for loan forgiveness to write off at least some of that debt.
Killen went to the website of Chase Bank, the bank in charge of administering his loan, to submit his application.
“It was pretty straightforward, he was just saying how much forgiveness are you asking for out of the $ 50,000 and I typed $ 50,000,” he said.
A few days later he received good news – his request was approved. But, it was only approved for $ 50. Three zeros were missing.
“It’s a horrible $ 50,000 misunderstanding,” Killen said. He attributes this to a typo or a computer glitch. And the company has a policy that the request can only be submitted once.
“They called me back and told me there was nothing we could do, they said there was nothing we could do,” Killen said.
Killen called 7 On Your Side Investigates and we called Chase. A company spokesperson said they are now working to fix the issue and have put more protections in place online to prevent it from happening again.
JPMorgan Chase sent a statement that states:
“We have contacted the SBA to try and resolve this issue for our client. For clients requesting a rebate, we remind them – both on our website and as they request – to verify the amount that “they put before submitting. We did not see any system issue that would cause this situation.”
When we contacted the federal government, a spokesperson for the US Small Business Administration said the responsibility lies with the bank.
“Lenders have been given the delegated authority by Congress to act as an agent of the government in the collection, approval, disbursement and processing of PPP loans. Borrowers demand a rebate from their lender.”
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