CINCINNATI — A Phoenix company has offered a loan to cover payroll expenses at Union Institute & University, where employees went without a paycheck for the entire month of March.
ERC Advance Funding said it’s willing to loan the school more than $1 million in exchange for a percentage of the roughly $3 million it expects from the Internal Revenue Service.
It made the offer after the WCPO 9 I-Team called its affiliate, Stenson Tamaddon LLC, to see if the school is owed money from Employee Retention Credits, a COVID-era stimulus program meant to help companies recover revenue lost during the pandemic.
“It’s true, they are owed $3 million from the IRS,” said Eric Stenson, a partner at Stenson Tamaddon, an accounting firm that claims to have helped more than 4,000 companies secure ERC payments. It also helped Union Institute apply for tax credits last year.
When Stenson contacted school officials about the I-Team’s inquiry, he told them about the firm’s financing arm, operated by Matt Hartley.
“We get them some portion of their money right away and then we wait for the IRS to pay us,” Hartley said. “We’ll have to work out the specific details with Union Institute, but we can move quickly on this.”
The financing help comes at a crucial time for Union Institute, which hasn’t paid salaried employees since Feb. 24 and last paid hourly employees March 10, according to Leslie Hamilton-Bruewer, a student success coach at the school.
Internal emails to about 100 employees show school officials have twice described financing options that never materialized, including a line of credit that President Karen Webb Schuster announced on March 29 but hadn’t arrived by 6:59 p.m. on April 5.
“I am profoundly sorry for any hardship the delay in payroll has caused, as we continue to wait for the expected deposit from the approved funder,” Webb told employees via email.
The U.S. Department of Labor this morning confirmed it has opened an investigation into the pay problems at Union Institute and the Ohio Department of Commerce said it’s looking into two complaints from unpaid employees. Neither provided details about their investigations.
Hartley is hoping to resolve the cash crunch as quickly as possible.
“Our CEO has requested that we fund them today,” he said. “We’ll see if we can do it as quickly as tomorrow. But I think it’s more likely to be next week sometime.”
