One lucky borrower got 17 PPP loans: How the Trump administration lost millions in an effort to shore up small businesses

WASHINGTON — Computer errors caused the government to hand out duplicate loans to thousands of borrowers under the Trump administration’s program to rescue businesses from the economic ravages of the coronavirus pandemic.

While the Paycheck Protection Program has been subject to fraud, the revelations contained in a new report by the inspector general of the Small Business Administration speak instead to a faulty — and costly — implementation.

Aging federal technology may have hampered the SBA’s inability to track and cross-reference loans. Two years ago, the Government Accountability Office found that information systems across the federal government were badly outdated. Some computer hardware at the SBA was a decade old, that investigation found.

A series of malfunctions took place in the spring and summer of 2020, resulting in millions of taxpayer dollars being handed out inadvertently as duplicate loans. In all, SBA Inspector General Mike Ware found, banks authorized to issue PPP loans “made more than one PPP disbursement to 4,260 borrowers, which totaled about $692 million and involved 8,731 PPP loans.”

Businesses were allowed to apply for PPP loans with several banks; it was the SBA’s duty to make sure that if a borrower had an application before one bank, applications before any other banks were withdrawn. If the SBA did not alert a bank that one of its prospective borrowers had other outstanding applications, that borrower would have no barrier to securing several loans.

At least 104 borrowers received three or more loans. One borrower received 17 loans from the federal government, for a total of $1.3 million. It was not clear who that 17-loan recipient was or how the borrower managed to secure so many loans when other prospective borrowers struggled to win a single award through the business-rescue program.

An official with the SBA inspector general’s office declined to divulge information about that borrower, or whether the borrower was being investigated by the agency. That official did confirm to Yahoo News that the 17 loans were not separate franchises of a large corporate chain, in which case the loans would have adhered to the program’s guidelines.