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Woman approved for COVID-19 relief aid, but then bank freezes her accounts

Kellye Thomas, who is a home daycare provider, was saved by a Paycheck Protection Program loan, but that lifeline became a nightmare.

More than 5 million small businesses have stayed alive thanks to the Paycheck Protection Program this year, but one woman has a warning for anyone applying for aid.

Kellye Thomas, who is a home daycare provider, was forced to shut down for three months due to the pandemic. She was saved by a PPP loan, but that lifeline has become a nightmare.

"I applied for that through the small business administration,” Thomas said. “I was granted the loan for $2,500."

Before she could even begin using the funds, she said her bank shut her account down.

"The check was deposited, and a few days later, I noticed there was a freeze on my account," she said.

Panicked, Thomas called the bank.

"They let me know I needed a business account to receive the funds from this loan."

A lot of independent workers and small business owners use just one account for everything because it is so much easier, but if you are getting any sort of federal aid, doing that can be very risky.

Business Insider said PPP loans must be put into a separate account to prevent payroll errors, accidental misuse and questions from your bank.

That's what happened here; the bank's investigation locked Thomas from all her money.

"We take potential fraud seriously and are diligent stewards of our customer's money,” a Fifth Third Bank spokesperson said.

Since there was no fraud in this case, the bank has unlocked Thomas accounts.

Now she's warning others.

"I have always had my daycare money deposited into my personal account,” Thomas said. “No one ever said anything about it or said I needed to open up a business account."

Business Insider said there is one more reason to keep PPP money separate— getting the loan forgiven.

It’s a reminder to keep tight records, so you don’t waste your money.