“Did I feel insulted? Yeah, because I always feel like the little guy gets the handle first, ”Kraemer said.
NEW ORLEANS – As the small business administration tries to root out fraud in the hundreds of billions of dollars it approved for emergency loans during the pandemic, a local business owner voices frustration recent experience with the SBA.
Shortly after the start of the pandemic, the SBA relaxed its emergency loan requirements so that restaurants, stores, and mom and pop stores could try to stay afloat. Ad owner Kraemer considered taking out a $ 10,000 loan at the end of last year, but then decided against it.
“I did not accept the terms of the loan. I didn’t have any money other than the money I didn’t ask for, which was the thousand dollars, ”said Craig Kraemer.
Kraemer owns Kraemer Advertising, a video production and editing studio in New Orleans. He said that when he received this mysterious $ 1,000 deposit into his Capital One corporate bank account, he contacted the SBA.
“That’s what was so confusing, I didn’t take the loan, I didn’t want the loan, yet they were giving me a thousand dollars. They said it was forgivable, just a big giveaway, ”Kraemer said.
Then last week, Kraemer said Capital One froze its corporate account because the SBA wanted to investigate potential fraud in the massive paycheck protection program and what are known as loans in the event of failure. economic disaster.
“Did I feel insulted? Yeah, because I always feel like the little guy gets the handle first, ”Kraemer said.
Last fall, a federal audit found that the SBA had approved more than $ 14 billion in COVID emergency loans to accounts that did not match those in the original loan application. Kraemer said he was happy the SBA was tackling the fraud, but said in his case he took the wrong approach.
“I felt like they were holding my money hostage, while they investigated to determine if I was innocent. So they assumed I was guilty, froze my account and then determined as they wished if I was guilty or not, ”Kraemer said.
A regional SBA spokesperson said Monday they can’t comment on specific cases, but some banks are freezing accounts due to FDIC-mandated responsibilities.
The spokesperson added that the SBA is not ordering banks to freeze accounts, but is aggressively pursuing potential frauds. Kraemer’s account was reopened on Monday, but he wonders how many other small businesses could face the same scrutiny and inconvenience at a time when the pandemic is causing enough trouble.