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She applied for SBA PPP loan forgiveness. A typo cost her $12,000.

A fix could be on the way, but one owner's experience offers a cautionary tale on the need to carefully review loan-forgiveness packages before submitting them.

DALLAS — Editor's note: The video above is from December 2020.  

A typo cost her $12,000.

A small-business owner in the healthcare industry — who asked that she not be identified for fear it would affect her business — had gotten a Small Business Administration Paycheck Protection Program loan for more than $13,000 in April 2020, and when it came time for her to apply for forgiveness earlier this year, she thought she was set.

She had spent all the money on payroll and navigated Fifth Third Bank's forgiveness application. But when the SBA reimbursed her bank, which reimbursed her loan, she found, to her horror, that the decimal point on her forgiveness request had been off by one space.

Instead of getting the full $13,000 forgiven, she got roughly $1,300 forgiven, leaving her about $12,000 on a loan she would have to spend years paying off at 1% interest. She has spent the days since navigating the SBA and her bank’s internal bureaucracy, spending hours on hold and dealing with people who had fewer answers than she did, only to come away with a depressing conclusion: There was nothing anyone can do.

“I have never had a situation where you can’t correct it,” the business owner said in an interview. “Now, I am paying for this. Wasn’t Covid hard enough for our small-business owners? We are trying our best but now we are screwed. I am disappointed that the bank wouldn’t help us and that they don’t check the small loans before they go to the SBA.”

Fifth Third Bank said in a statement that it was "supporting all of our customers who might have issues with their loans."

"This type of circumstance is extremely rare and requires additional guidance to resolve the issue from the Small Business Administration," the bank said.

This business owner has seemingly fallen through a crack in the PPP forgiveness system — namely, that those who get partial or even no forgiveness from the SBA despite meeting the qualifications because of a typo like hers have little to no recourse. While PPP loan-forgiveness decisions can be appealed, it is unclear if that appeals process applies to typos and clerical errors, especially if they were submitted by the small-business owner or by the person's bank.

To read more about the SBA’s reaction, click here.