Lisa Freeman received a curious inquiry from a TV news reporter Wednesday.
Why had her quaint, seasonal ice cream shop – a longtime fixture in downtown Saugatuck that Freeman
has owned for 2½ years – been given millions of dollars in Paycheck Protection Program funds from the U.S. Small Business Administration?
“I answered the phone and I thought this was some kind of a joke,” Freeman, 54, of Saugatuck recalled. “I learned about this from a reporter over here.”
I had the same question for Freeman after scouring loan-level data released Monday by the SBA detailing recipients of the PPP. Businesses that received more than $150,000 are identified with names and addresses, while those under that threshold do not include such identifying information. Exact loan amounts in the higher-tier aren’t provided and are instead broken down by range.
Near the top of the higher-tier list, nestled in the $2-$5 million range between well-known powerhouses like Zehnder’s of Frankenmuth, Buddy’s Pizza and National Coney Island — all of which employ 250 people or more, mind you – there was ‘Round the Corner Ice Cream Shop LLC.
The PPP was designed specifically to help businesses with labor costs and the rent or mortgage and loan amounts are based on those figures, all of which require extensive documentation during the application phase. So how did a tiny little ice cream shop with 10 employees receive so much money?
In short: It didn’t.
“The public really needs to be aware,” Freeman said by phone Thursday, a day after finding out about the mistake. “This is a grave error. So far we’ve not been able to really get any answers as to why it happened or what’s been done to rectify it.
“I will clarify I did not get $2 million.”
In a brief statement emailed to the Free Press on Thursday, a representative of the SBA said: “The amounts listed are the amounts approved, not necessarily the amounts disbursed.”
Freeman said she did apply for the PPP loan in April for both the seasonal ice cream shop and her larger retail business, a Saugatuck-based spice and tea retail store with multiple Michigan locations and franchises around the country. She said the ice cream shop received less than $20,000 and the retail company got under $100,000. There’s no reason she should have even been on the higher-tier list with its identifying information in the first place.
Freeman isn’t happy about that and said it adds another level of uncertainty and fear to an already ambiguous situation.
“Even when I applied for these loans, I was very tentative,” she said. “I needed the money. I knew I could use the money appropriately. But there was so much gray area around it that it was very scary.
“One of the biggest questions in my own mind was are they going to try to come after me for $2 million at the end of the day? … What does this mean in their books? If they think they gave me $2 million and they’re telling the American public this? What does this mean? They’re going to raise taxes. It’s going to come out of your pocket and my pocket eventually. This is a serious problem.”
Freeman isn’t alone, either. Since the SBA data was released, reports have proliferated of companies that either didn’t receive the amount listed, or worse, never applied in the first place. How widespread the errors are is unclear at the moment, but Freeman said it’s a major problem.
“My thing has always been if you see one mouse, there’s a hundred,” she said. “This is the same thing. I’m one mouse, but there’s a hundred more or a thousand more or ten thousand more out there. If this isn’t exposed or uncovered to the public, is our government going to be held accountable?”
