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$1 loans? $10 million for a nail salon? Colorado’s federal coronavirus loan data has some eye-popping errors

As the federal Paycheck Protection Program heads into the forgiveness phase, Colorado companies are preparing to prove funds were used to save jobs

The Denver Art Museum on July 7, 2020. DAM received millions from the federal Paycheck Protection Program to avoid layoffs, but even after reopening is only seeing 25% of usual ticket sales. (Eric Lubbers, The Colorado Sun)
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The small business jackpot of $660 billion in forgivable loans helped thousands of small businesses in Colorado get through the coronavirus-related shutdowns in March. But just as the application process for the federal Paycheck Protection Program proved chaotic, so too is making sense of the data that shows who received how much.

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Some companies are suddenly in the public eye after the Small Business Administration released details that proved inaccurate.

In one case, loans for the Snappy Nails & Spas in Broomfield and Westminster came in between $5 million and $10 million each to keep nine and 14 employees, respectively, on payroll.

An employee who answered the phone Tuesday at the Snappy Nails in Broomfield said the company did get a PPP loan, but for much less. Owner Vinh Pham spoke to 9News reporter Steve Staeger and said the loans were less than $100,000. Pham did not respond to questions from The Colorado Sun.

Christopher Chavez, a spokesman for the regional office of the SBA, said the official list of paycheck loan recipients was based on initial approvals and does not indicate the company accepted and used the money.

In Snappy Nails’ case, Chavez said that after some investigating, the SBA learned the larger loan amount was due to a data-entry error by the lender, Bank of the West. The amount was adjusted prior to disbursement, but the new amount is not reflected in the new data. The bank did not respond to questions about the error.

In another case, one loan to a Silverthorne business was reported at $1. That’s probably an error too, Chavez said.

“The public data reflects approved loans, which does not mean that the loan has been disbursed or funded,” Chavez said in an email. “I am not sure why the data does not reflect the final dispersed loan amount. Most likely the $1 is an error by the lender – (they) may have forgot some zeros, but I assume the loan amount was corrected by the lender and the amount dispersed is more that $1.”

See the searchable list of Colorado companies at end of story.

Caveats with SBA data

There was also a lot of missing information in the SBA data. Most applicants didn’t answer the questions about the business owner’s race, gender or veteran status. Another 1,377 did not list the number of employees they had.

Chavez said demographic information is voluntary and legally, federal fair lending laws have prohibited lenders from seeking these types of data.

But details on how many jobs were retained will be collected as companies request loan forgiveness. 

“In order to receive forgiveness they will have to show their lender how many employees they have and how much they paid them,” Chavez said.

Some companies outside of Colorado landed on the SBA list but said they didn’t receive a loan or didn’t even apply for one. California scooter company Bird was on the list for a $5 million to $10 million loan but said Monday on Twitter it decided not to apply “as we did not want to divert critical funding from small and local businesses.”

While few Colorado companies have yet to come forward saying they should not be on the list, the large majority of Colorado’s 104,402 loans for $10.4 billion seem to have helped the small businesses the funding was intended to help.

The Denver Art Museum, which was closed for three months, received a $3.2 million PPP loan allowing the nonprofit to keep all 360 staff members during the closure. The museum reopened June 26 but “is at about 25% of its normal visitor capacity” due to government guidelines and after the PPP loan ran out, it did reduce some staff, museum spokeswoman Kristy Bassuener said.

MORE: Here’s a list of every Colorado business that received a Paycheck Protection Program loan

Without the loan, Roy Clennan said he would have had to make some tough calls at Mortgage Solutions Financial in Colorado Springs. The company received a loan between $5 million and $10 million, though the SBA data showed no jobs-retained number on record. Clennan wasn’t sure why — he used the money to keep his 485 employees employed.

“The cash flow from this loan allowed us to keep people going,” said Clennan, who started the company in 1995. “Not one person in our company missed a paycheck. Not one person was laid off.”

The money also helped Mortgage Solutions employees adjust to working from home, which included buying computers or other equipment so everyone is prepared to continue operating at home if there is another shutdown. Clennan doesn’t think that’s going to happen. But if it does, he believes his business will survive without another loan.

“A lot of people out there feel like this was just a bailout for corporations, but it wasn’t,” Clennan said. “This was keeping employees from being terminated and going on unemployment. It was keeping people with their health care. It was actually keeping people going, while we figured out where this whole pandemic was taking us. I don’t like government bailouts for the most part, I don’t like any of this type of stuff, but this is a loan and quite frankly, it was well done.”

The Colorado Sun received a $212,000 PPP loan for 13 employees. According to SBA data, about 91,000 small businesses in Colorado received loans of under $150,000. About 13,000 received loans of more than $150,000 with about 95 approved for loans between $5 million and $10 million.

“There’s a lot of companies in there that you’ve never heard of and that’s good news because that means it is getting to the small businesses,” said Mac Clouse, a finance professor at University of Denver’s Reiman School of Finance. “It’s kept people employed, which has been important.” 

PPP recipients include VC-backed and public companies

The PPP loans, which were limited to $10 million per company, were based on a company’s average number of employees in a given month. Companies of up to 500 employees could qualify for 10 weeks of paychecks per worker. If the money was used mostly for payroll and staff retained, it will be forgiven or else turn into a loan with 1% interest.

But since the PPP program launched in early April, the rules have changed. Some companies canceled their loans because midway, the Treasury Department announced it would audit all loans above $2 million and also look closely at public companies with access to capital. At least two publicly traded companies, DMC Global in Broomfield and Red Lion Hotels in Denver, returned their loans of $6.7 million and $4.2 million, respectively.

Several public companies in Colorado kept their loans, including New Age Beverage Co., the Denver distributor of Xing green tea and other beverages. The $6.9 million loan helped it keep 442 workers employed, according to Greg Gould, New Age’s chief financial officer.

“As we have stated in our SEC filings and investor conference calls the COVID pandemic and the economic shut down has had a negative effect on our business,” Gould said in an email. “The PPP loan has been very beneficial in helping us maintain the jobs of our dedicated team here in Colorado, Utah and throughout the U.S. during this difficult time.”

A drive-thru customer at Good Times on Broadway in Denver gets a frozen custard treat on Aug. 6, 2019. The Colorado burger chain and its Bad Daddy’s restaurants received three federal Paycheck Protection Plan loans for a total of $11.6 million. (Eric Lubbers, The Colorado Sun)

Another public company, Good Times Restaurants, received three loans for a total of $11.6 million. Before getting the loans, the company had reduced managers’ pay and cut some staff. Pay was restored and folks were rehired after the loans were approved, though not all returned. 

The SBA now allows companies to use up their loans in 24 weeks instead of eight. CEO Ryan Zink said Good Times is still using the PPP loans to pay staff as pandemic-related uncertainty lingers. 

“The program for us has been extremely helpful,” Zink said. “In particular, we operate not just in Colorado, but in the southeast. In some states where counts are increasing, there remains a lot of uncertainty around what the future holds for restaurants and business in general for businesses that are directly customer facing.” 

On Tuesday, Good Times reported its third-quarter earnings, which actually increased 11.9% from last year at its fast-food burger stores, but declined 36.7% at its Bad Daddy’s eat-in restaurants, which have reopened at a limited capacity.



There were venture-backed companies that still borrowed money, including robotic toy maker Sphero in Boulder, which was approved for a loan between $2 million and $5 million. The company has raised more than $100 million from investors. Sister company Misty Robotics, which launched in 2017 with $11.5 million in venture funding, got a loan of between $350,000 and $1 million.

Apto, a real estate software company that raised $5 million in venture funding last September, qualified for a loan between $350,000 and $1 million for its 30 workers. 

Welltok, a health care technology company that has raised $251 million in venture capital in the past — and most recently $75 million in 2018 — is also listed as receiving a $5 million to $10 million paycheck loan. The loan helped Welltok keep its workforce of roughly 400 people, the company said in a statement.

“We work with health plans, employers, hospitals and health systems across the country. All of our clients have faced instability and financial distress due to the pandemic, which has negatively impacted our business as well,” the company said. 

What hasn’t happened yet is PPP loan forgiveness. The forms are available online, but many banks were waiting for PPP to end on June 30. Congress has since extended the loan application deadline to Aug. 8 and there is still more than $100 billion available for small business loans.

But as part of the terms, companies were supposed to keep workers employed. Those that laid off workers or had access to other capital may find forgiveness challenging. 

EcoGen Laboratories, a CBD manufacturer in Grand Junction with $80 million in revenue last year, received $40 million from private investors in January. In April, the company was approved for a $2 million to $5 million PPP loan to retain 163 jobs. In June, the company notified the state’s Department of Labor and Employment that it would lay off 101 employees by July 1. This was in addition to a few dozen cuts made in the spring. The company did not return a call asking for an explanation.

Others may not even be around to ask for forgiveness.

Mountain States Rosen, a co-op of sheep ranchers in Greeley, filed for bankruptcy in March. A month later, it was approved for a PPP loan of $2 million to $5 million to keep 219 people employed. In June, it notified the state labor department that it was closing its facility in Greeley and all 222 employees there would be affected.

But without the PPP funding, which amounted to approximately $660 billion nationwide, it’s difficult to imagine how so many small businesses could have survived as long as they have, said Clouse, with DU.

“We were up to (11.3%) unemployment. We just can’t have that for a long period of time, and have an economy that’s going to survive,” Clouse said. The Paycheck Protection Program “accomplished what we needed. It got money to small businesses.”

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