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Home Commercial Lending

SBA OIG calls out lack of guidance to lenders on PPP fraud

June 8, 2022
Reading Time: 1 min read
SBA OIG calls out lack of guidance to lenders on PPP fraud

The U.S. Small Business Administration failed to provide lenders with “sufficient, specific guidance to effectively identify, track, address and resolve potentially fraudulent [Paycheck Protection Program] loans,” a new report by the SBA Office of the Inspector General found. The report also noted that SBA lacked a detailed, well-defined structure to handle PPP fraud.

Among other things, the OIG recommended that SBA through its Office of Capital Access provide lenders with formal guidance addressing the handling of PPP fraud. “Because SBA did not provide specific guidance to lenders, they were faced with uncertainty on how to resolve issues they were uncovering,” the OIG said. “The lack of specific guidance for lenders increased the risk of guaranteeing and forgiving PPP loans for potentially fraudulent and ineligible applicants.”

The OIG identified more than 70,000 potentially fraudulent PPP loans, totaling more than $4.6 billion.

Tags: CoronavirusCOVID-19SBA Paycheck Protection ProgramSmall businessSmall business lending
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