According to the U.S. Small Business Administration, roughly 3,370 Burbank businesses received potentially forgivable federal loans during a pandemic that sank the economy into a recession — though the source of that information is being called into question.
Those businesses, including sole proprietorships and self-employed individuals, received approval for Paycheck Protection Program loans from lenders. Altogether, the Burbank businesses that were approved for loans said the money would allow them to save more than 34,000 jobs
However, there have been reports of businesses and officials across the nation saying that the data from the SBA, released July 6, contains many errors, including inflated loan amounts.
As a result, the reliability of some of the SBA’s data set — released after congressional calls for the $699-billion program to publish it — has been thrown into doubt.
“I think there is a real issue with transparency,” Congressman Adam Schiff, whose district includes Burbank, said in a phone interview. “There were a lot of bad numbers coming out of that disclosure.”
SBA spokeswoman Shannon Giles said in an email that the department reported only approved — not disbursed — PPP loans: “Lenders report their PPP disbursements monthly, so there is a data lag between approval and disbursal reports.”
But some businesses — including electric scooter company Bird, which made an announcement on Twitter disputing the data — argue the data set lists them as having received loans they never requested.
Schiff also said feedback from businesses about the program has been mixed. Those that received loans have been grateful, he said, but many have struggled to establish communication with lending banks.
“For millions of businesses, it was a lifesaver,” he said. “But for others, it was frustrating and inequitable.”
FILM INDUSTRY GETS LOANS
According to the SBA data, most of the Burbank businesses that requested money through the PPP were approved for loans smaller than $150,000, with more than $6.4 million of loans in that range going to at least 160 businesses in the film industry, not including independent writers and actors.
Restaurants and physician offices also received many of those smaller loans, with 22 religious organizations in Burbank receiving a total of $1.24 million. The Western Diocese of the Armenian Church, headquartered in Burbank, received between $150,000 and $350,000 in loans not included in that figure.
Woodbury University received a $4.4 million loan from the program, according to an email from university President David Steele-Figueredo.
“Due to increased expenses in hardware, software and student support from moving to an online environment in March, 2020, the PPP loan has allowed us not to furlough employees, or reduce employment on campus; and to defray other institutional expenses,” he said.
The exact size of loans of more than $150,000, which accounted for about 10.6% of the loans received by Burbank businesses, is unknown, so it is impossible to tell from the data release exactly how much PPP funding was given to local companies.
For example, Pixelogic Media, a distribution company for the entertainment industry, received the largest loan to a Burbank business at between $5 million and $10 million. According to the SBA data, the company will retain more than 400 jobs with the loan.
Not all companies claimed to be as successful at job retention. Between $6.4 million and $15.55 million in loans of more than $150,000 went to Burbank businesses that said they would save zero jobs with the funds. Another $8.6 million in loans of less than $150,000 went to businesses saying the same.
Other errors and gaps muddled the merit of the data further. Some of the ZIP codes listed belong to non-Burbank locations, such as in Burbank. At least one belongs to a county in Montana. More than 250 businesses did not say how many jobs, if any, they would retain with the loans they received ― a requirement for loan forgiveness.
And some of the businesses listed that received loans of less than $150,000 did not have their industry identified.
Schiff also believes that the funds could be subject to fraud or misappropriation, “given this [Trump] Administration’s history of nepotism and cronyism.”