Financial Advisor obtaining a PPP Loan

[All Is Lost]

OP has presented no good evidence any wrongdoing occurred. The details of the financial advisor's PPP loan application are about as much OP's business as my personal tax returns are to my housekeeper. The overreaching and judgement in this thread border on bizarre to me.

Calling my question Bizarre?? Really Maybe since I am a Low Class Person who does not have the luxury of having a housekeeper is the reason I don't understand what you are implying.

I think the person I entrust with what little money I have to invest IS indeed my business.

 

[Scratchy]

Calling my question Bizarre?? Really Maybe since I am a Low Class Person who does not have the luxury of having a housekeeper is the reason I don't understand what you are implying.

I think the person I entrust with what little money I have to invest IS indeed my business.

Just for the record, my example of a housekeeper was not in any way aligned to any implication of wealth, class, privilege at all. I had no knowledge or interest in whether you have a housekeeper, nor do I even consider that a strong indicator of economic class.

I stand by my opinion that the PPP loan is not your business or concern. Integrity is important in almost every profession but I wouldn't dream of asking my accountant, doctor, car mechanic or anyone else I do business with about their PPP loan application details and if someone I do business with asked me about my financial filings I'd also find that bizarre. BTW if someone starting probing my finances I'd cease contact with them even though I do not think I'm guilty of any gross impropriety, so if your financial advisor refuses to answer your questions or loses interest in having you as a client I wouldn't conclude that anything improper had occurred.

 

[ivinsfan]

I appreciate the advice. Looks like I need to find a new FA. Since I am clueless about investments I suppose I will need to stay with her until I find a new one.

If anyone is interested, listed below is a link to businesses that received the PPP money and details on if it was forgiven. In the search function just type in the Zip Code that you are interested in. https://projects.propublica.org/coronavirus/bailouts/search?q=

You have given this lady access to all your finances and trusted her guidance. Yet you are willing to throw away that trust without even asking a simple question? ...I'll ask again how are you are privy to knowing exactly how many people are on her payroll. Have you had other concerns about her integrity .

 

[Fermion]

I guess it all depends on how you came about the information and what it is.

If you were in the other room and heard her talking on the phone to someone, bragging about how she scammed the government out of $200,000 by listing her three dogs as employees, then yeah.

If you didn't report something like that, then I would hope you would also not report smaller things, like someone stealing your neighbor's car or lawnmower as it would be somewhat unfair.

 

[ERD50]

...

If anyone is interested, listed below is a link to businesses that received the PPP money and details on if it was forgiven. In the search function just type in the Zip Code that you are interested in. https://projects.propublica.org/coronavirus/bailouts/search?q=

So that link is interesting. We're in a fairly small community, not a ton of small business, but that was a long list, and lots of $ (some 6 figure, lots of mid 5 figures). A local body shop got $228,000 forgiven.

Maybe these handouts make sense overall, obviously many businesses were hurting, but doing it with any sense of "fair" just isn't realistic.

I was a little surprised to see $40~$60K for some local State Farm insurance places. Is the insurance business hurting? I dunno, hard to say.

I appreciate the advice. Looks like I need to find a new FA. Since I am clueless about investments I suppose I will need to stay with her until I find a new one. ...

Well, it's not the question you asked, but it might be the most important one.

In all likelihood, your best next FA is you. It's actually very easy - the industry built up around it wants you to believe it's complicated, time consuming, and you don't have a chance of investing as well as the "pros".

But none of that is true. You can probably put you money in 2 or three broad based index funds/ETFs, and that's it. No fuss, no muss. Now, it takes a while to understand that it really is this easy, but it is. Hang around and learn.

As far as the OP, I'm also curious how you learned about this loan, and why you question the number of employees. How do you know who is an employee?

-ERD50

 

[Franklin]

OP has presented no good evidence any wrongdoing occurred. The details of the financial advisor's PPP loan application are about as much OP's business as my personal tax returns are to my housekeeper. IMO some of the overreaching and judgement in this thread borders on bizarre.

Plus 1 Here. I am about as far right and conservative as can be but I think OP has reached a bit too far. These businesses got approved and (for what we know) followed the laws. So whether they got a loan or not should not be an issue . Argue the PPP program if you will, but it seemed to work. Will there be abusers, sure (just like any govt program), but those companies followed the offerings of the government at the time. I know plenty of recipients and they did as suggested by the SBA etc at the time. Let's not throw them under the bus for this. Now if StarBucks is on the list I'll revere my opinion.

 

[All Is Lost]

You have given this lady access to all your finances and trusted her guidance. Yet you are willing to throw away that trust without even asking a simple question? ...I'll ask again how are you are privy to knowing exactly how many people are on her payroll. Have you had other concerns about her integrity .

ivinsfan, This is a very small office with a total of 4 employees. I have been told by the owner that it is just the 4 of them. I have not had any other concerns about her integrity.

What bothers me is the fact that my FA needs a loan, when on the surface it appears they don't. In addition, it bothers me that they claim to have a certain number of employees when in fact they don't.

After researching more about this PPP stuff, it amazes me how many businesses get this "free Money" when in fact it appears they don't need it.

I am a person that is not very educated or very savvy. I am just a simple man that is just trying to get by. All I ask for is a FA who can help me ensure security for my wife and child. For me, I could live out of a cardboard box in a nice part of town and be happy.

 

[ivinsfan]

ivinsfan, This is a very small office with a total of 4 employees. I have been told by the owner that it is just the 4 of them. I have not had any other concerns about her integrity.

What bothers me is the fact that my FA needs a loan, when on the surface it appears they don't. In addition, it bothers me that they claim to have a certain number of employees when in fact they don't.

After researching more about this PPP stuff, it amazes me how many businesses get this "free Money" when in fact it appears they don't need it.

I am a person that is not very educated or very savvy. I am just a simple man that is just trying to get by. All I ask for is a FA who can help me ensure security for my wife and child. For me, I could live out of a cardboard box in a nice part of town and be happy.

Ok so how many employees did they claim..you could pay a cleaning person, or an office accountant or such. ..unease with certain government programs is something you need to work through by your own standards.

 

[mrfeh]

You have given this lady access to all your finances and trusted her guidance. Yet you are willing to throw away that trust without even asking a simple question?

The problem I see with "asking her" is that if she is a crook, OP probably won't get an honest answer anyway.

 

[youbet]

Where have I stated such an assumption? Quotation, please.

“My rule on dishonesty in a situation like this”

 

[athena53]

In looking at the details of the loan, the number of employees she listed does not match the actual number of employees that work there.

Is it possible she has some who work from home?

 

[youbet]

What bothers me is the fact that my FA needs a loan, when on the surface it appears they don't. In addition, it bothers me that they claim to have a certain number of employees when in fact they don't.

After researching more about this PPP stuff, it amazes me how many businesses get this "free Money" when in fact it appears they don't need it.

This appears to be the real problem. If having your FA accept the Fed Gov benefit she was offered bothers you, move on to a new FA or learn to DIY. Ditto for any of the other businesses in town you deal with that accepted PPP.

If you are reasonably confident that the number of employees your FA is cutting checks to is smaller than the number she used on the PPP application, turn her in. There are instructions for doing so confidentially you can find on the web. IMHO, you really have an obligation to do so.

But whether fraud was committed on the application or not, it’s time to move on since your philosophy and outlook regarding the “free money” differ strongly from the FA and will always taint the relationship going forward.

 

[Philliefan33]

I entered my zip code and found that most of the local businesses obtained PPP loans, and all of them had at least a portion of the loan forgiven. The stated purpose for each loan that I looked at was "payroll".

Some of the loans were >$100,000 given to some (usually) thriving businesses in town. They thrive when they can be open for business, but recall that when these loans were given most of the country was locked down with only "essential" business allowed. So the local electrical contractor who claimed 15 employees got money to cover his payroll. I've got no problem with him using the PPP program as long as he passed that money on to his employees when they were not allowed to work.

When the loans were taken there was no guarantee that they would be forgiven and there was no known end date for the business disruption. I don't begrudge any business owner for using a tool to keep the business going.

 

[Bruno]

If anyone is interested, listed below is a link to businesses that received the PPP money and details on if it was forgiven. In the search function just type in the Zip Code that you are interested in. https://projects.propublica.org/coronavirus/bailouts/search?q=

Thank You for this! I also entered a couple of Zips and it does make me wonder how legitmate some of these are. I searched Sonic drives and found many of them got about 100k for several Sonics in a town of 2500 ppl. Maybe the guy who owns them all is where he lives.

Worst part is it ONLY shows you the FIRST 100!!

 

[Fermion]

Man some of the ones in our area...a mini storage got something like half a million forgiven.....did people stop storing stuff during the pandemic? I remember trying to find a storage unit in 2020 and they were all full.

 

[youbet]

It would be great to have a discussion (in the political topics section) on the PPP in general and leave this thread to OP’s unique situation where he accuses his FA of fraud.

Mods, can the thread be split?

 

[Bruno]

It would be great to have a discussion (in the political topics section)

Can you tell me where this Section is at?

 

[youbet]

Can you tell me where this Section is at?

The new name is “Fire Related Public Policy.” We would need to discuss PPP in terms of FIRE.

 

[MichaelB]

It would be great to have a discussion (in the political topics section) on the PPP in general and leave this thread to OP’s unique situation where he accuses his FA of fraud.

Mods, can the thread be split?

The thread looks a bit messy right now, with lots of back and forth. It’s not clear where or how to split. Perhaps members can get back on topic ...

Can you tell me where this Section is at?

The FIRE related public policy forum is here https://www.early-retirement.org/forums/f52/ Please read the rules before posting. The topic really should be related to our forum which is early retirement and financial independence.

edit - I see Youbet bet me to it. Thanks!

 

[RetiredAndLovingIt]

Thank You for this! I also entered a couple of Zips and it does make me wonder how legitmate some of these are. I searched Sonic drives and found many of them got about 100k for several Sonics in a town of 2500 ppl. Maybe the guy who owns them all is where he lives.

Worst part is it ONLY shows you the FIRST 100!!

Very interesting. I checked the list for my area and see something definitely weird with a couple franchisee names affiliated with a major company that have now filed chapter 11 but got millions in PPP loans under 2 different names. The LLC corporate address is about 5 minutes from my house, the physical locations are out of state. It's odd that they would have California who is not known for being business friendly as their headquarters. I'm pretty sure our local franchisees operate under a different name. Also our local newspaper don't seem to have never published any stories on this.
I'm going to do a little digging just for my own curiosity.

 

[target2019]

Should I be concerned that my Financial Advisor applied for and received a Payback Protection Program (PPP) loan, and the loan was forgiven?

In looking at the details of the loan, the number of employees she listed does not match the actual number of employees that work there.

Please know that I did not actively seek out to see if she had taken out a loan. I have been a client of hers for a very long time. What would you do?

I would be concerned. Did the FA lose business during that period? I find it hard to accept that. However, there was a low bar for that money. If someone took 500K and had just 100K of salary to cover, then I'd be bothered. But I don't think there's enough to launch an expensive federal investigation.

At the time I know there was much debate about not publishing this information at all. Some wanted company ownership to be included, but you don't see that.

I found a defense contractor with local office. Headquarters is in Virginia, but local office got PPA for mortgage interest, utilities and payroll (13). Makes you wonder what would be found in an audit. But I'm not losing sleep over it.

 

[Sunset]

... If someone took 500K and had just 100K of salary to cover, then I'd be bothered. But I don't think there's enough to launch an expensive federal investigation.

....

Easy solution: Owner and family give themselves 500% temporary wage increases

I don't think the investigation would be expensive. Gov't just has to mail a letter seeking clarification on the employee number (name, SSN, address, dates, phone numbers) . Then call/contact those folks to see what they say. Like how the IRS looks into things.

I'll bet quite a few turn up as cheats just by the letter (they will forget what they claimed earlier, or suddenly can't remember employee names.

 

[Bruno]

Here is a better site to see ALL the PPP for a zip code not jsut the first 100.
You have to go down the page to the search tool.

https://www.federalpay.org/paycheck-protection-program

 

[tb001]

I can think of loads of reasons to fire a FA, but this wouldn’t be anywhere near the top of the list. In fact, that’s probably a better indication that they’re at least somewhat financially savvy. There was a decent amount of documentation required for these and you have zero actual knowledge of their finances. As others have said, the bar for forgiveness was extremely low. IIRC, all a business had to do was show a certain % loss in one quarter.

 

[ExFlyBoy5]

Keep something in mind...when PPP came out, there wasn't a forgiveness component to it...that came later.

I will also add that I w*rked for the SBA for a short period of time and was involved in the PPP program for a little bit of my tenure. The SBA has brought on THOUSANDS of temp employees to try and wade through the massive amount of work that PPP created. Oh, and let's not forget that there were countless natural disasters that have occurred in the COVID era that has added even MORE work to the SBA (they also have economic injury disaster loans that individuals, not just businesses can qualify for) that had them absolutely SWAMPED over the last few years. Temp attorneys who are brought on are expected to work 10 hours a day 6 days a week with very few exceptions and it has been that way for over two years. What I am trying to say, is with that level of work...errors are going to be made, and yes...people will take advantage.

I don't think the investigation would be expensive. Gov't just has to mail a letter seeking clarification on the employee number (name, SSN, address, dates, phone numbers) . Then call/contact those folks to see what they say. Like how the IRS looks into things.

I'll bet quite a few turn up as cheats just by the letter (they will forget what they claimed earlier, or suddenly can't remember employee names.

Yeah, not easy...not easy AT ALL. There were SO MANY people trying to game the system (mainly oversea scammers) it would take resources that just aren't available to investigate. For almost every single legal file I reviewed, they would also have applications that were "flagged for fraud"...we are talking hundreds of thousands of applications. In practice, if something didn't look right, the application was kicked back to the bank. Most of the time, it "timed out" and no action was taken. Attorneys were expected to make these reviews in 5 minutes or less.