News of the Day September 15, 2026
SBA Announces Suspensions for 870,000 U.S. Borrowers Tied to $39 Billion in Suspected Fraud

Yesterday, SBA Administrator Kelly Loeffler announced that the U.S. Small Business Administration (SBA) suspended 870,000 U.S. borrowers connected to an estimated $39 billion in suspected fraudulent pandemic-era Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) activity.

The nationwide action marks the culmination of the SBA’s state-by-state pandemic-fraud crackdown as a member of the White House Task Force to Eliminate Fraud. It is the agency’s largest suspension announcement to date, representing action against borrowers in 45 new states, six territories, and the District of Columbia.

The SBA previously announced suspensions of more than 150,000 borrowers tied to approximately $10 billion in suspected PPP and COVID EIDL fraud across five states: California, Ohio, Minnesota, Maine, and Wisconsin.  Suspended borrowers are prohibited from receiving future SBA small-business and disaster loans and are ineligible for other SBA programs, including federal contracting through the 8(a) Business Development Program.

In a separate enforcement action, the SBA and its Office of the Inspector General, led by William Kirk, also announced that it is launching “Operation No Doze.” Under the operation, the SBA will send final 30-day demand letters to suspected fraudulent PPP and COVID EIDL borrowers, starting with approximately 8,000 in Kansas and Missouri. The letters will demand repayment of debt associated with the flagged loans and notify recipients of the consequences of failing to resolve their obligations within the required timeframe. The SBA previously referred more than 560,000 suspected fraudulent pandemic-era borrowers tied to $22 billion in loans to Treasury for collection.

Borrowers who fail to remit full payment within the 30-day period may face further legal and financial consequences, including:

• Enforcement under the Administrative False Claims Act, which may subject fraudulent borrowers to liability of up to double the government’s damages, plus administrative penalties.
• Referral to the U.S. Department of Justice for further legal action, as appropriate.
• Transfer of delinquent debts to the U.S. Department of the Treasury’s Bureau of the Fiscal Service Cross Servicing Program for collection. Such transfers may result in added interest and collection fees of up to 28 percent.
• Offset through the Treasury Offset Program against certain federal payments, including tax refunds, contractor and vendor payments, federal salaries, and Social Security and other benefit payments.