SBA disaster loan application problem exposed 8,000 businesses

In still a big blow for small businesses trying to save their businesses, the Small Business Administration (SBA) acknowledged on Tuesday that its the site suffered from a bug that has allowed “Personally Identifiable Information” about thousands of businesses to leak online.

The SBA sent notifications to nearly 8,000 companies on Tuesday, saying the information they shared in their Economic Disaster Loan (EIDL) applications may have been exposed to other applicants. In a statement to CNBC, the SBA said it fixed the flaw “immediately” after discovering the bug, and that should no longer be a problem.

Not to be confused with the Paycheck Protection Program, EIDL loans are alternative financing options for businesses affected by the coronavirus outbreak. Applicants can obtain low interest SBA loans that are repayable for up to 30 years to help them finance their operations. EIDL loan applicants are also eligible for loan advances of up to $ 10,000 that would not need to be repaid.

The revelation is just the last black eye for the SBA and banks in general, after small and medium-sized businesses across the country failed to qualify for PPP financing before the 350 billion dollars allocated to the program are exhausted. The federal government plans to pass a measure this week that could recapitalize the P3 fund, but there is still no guarantee that every company that can qualify will actually get the funding it wants.

It is not known exactly when companies exposed to the EIDL loan problem may have been affected. However, the agency told the businesses concerned that they could benefit from a free year of credit monitoring to make sure they don’t fall victim to identity theft. So far, the SBA told CNBC, there has been no indication of wrongdoing among those who viewed the personal information.