Luetkemeyer warns against SBA changes to Economic Injury Disaster Loans (EIDL) program
WASHINGTON, D.C. – Today, House Committee on Small Business Ranking Member Blaine Luetkemeyer (MO-03) released the following statement warning against the Small Business Administration's (SBA) decision to raise the Economic Injury Disaster Loans (EIDL) program loan cap from $500,000 to $2 million. Reports from the SBA’s Inspector General (IG) and the U.S. Government Accountability Office (GAO) have continuously raised concerns about the SBA’s oversight controls within the EIDL program, and the SBA has not taken appropriate action to address these critical concerns of rampant fraud.
"The SBA's decision to increase the loan cap for a program that has received nearly 1.1 million fraudulent applications is incredibly concerning," Ranking Member Luetkemeyer. "Dating back to October 2020, it was reported that $78.1 billion of American taxpayer dollars were potentially subject to massive amounts of waste, fraud, and abuse within the EIDL program, and still the SBA has refused to do anything to safeguard this program. American taxpayer dollars are on the line. Committee Republicans have been sounding the alarm since the very beginning after receiving countless reports of fraud, and we will continue to do so."
Background:
The Economic Injury Disaster Loan program provides economic relief to eligible small business entities that are experiencing a temporary loss of revenue due to a disaster. The EIDL program is not a new program; it is an existing SBA program with a history of slow turnaround times and poor communication with borrowers.
The SBA is currently accepting new EIDL applications through December 31, 2021.
The SBA’s Inspector General’s first comprehensive audit of the COVID EIDL program from October 28, 2020 found $78.1 billion in potentially fraudulent EIDL activity. Through August 19, 2021, the SBA disbursed approximately $280 billion in COVID EIDL loans and grants. This equates to a fraud rate of nearly 30 percent within the program.
Additionally, in a response to a letter sent by Ranking Member Luetkemeyer, the SBA stated that 1.1 million EIDL applications have been flagged for identity theft concerns.
More EIDL data can be found here.
"The SBA's decision to increase the loan cap for a program that has received nearly 1.1 million fraudulent applications is incredibly concerning," Ranking Member Luetkemeyer. "Dating back to October 2020, it was reported that $78.1 billion of American taxpayer dollars were potentially subject to massive amounts of waste, fraud, and abuse within the EIDL program, and still the SBA has refused to do anything to safeguard this program. American taxpayer dollars are on the line. Committee Republicans have been sounding the alarm since the very beginning after receiving countless reports of fraud, and we will continue to do so."
Background:
The Economic Injury Disaster Loan program provides economic relief to eligible small business entities that are experiencing a temporary loss of revenue due to a disaster. The EIDL program is not a new program; it is an existing SBA program with a history of slow turnaround times and poor communication with borrowers.
The SBA is currently accepting new EIDL applications through December 31, 2021.
The SBA’s Inspector General’s first comprehensive audit of the COVID EIDL program from October 28, 2020 found $78.1 billion in potentially fraudulent EIDL activity. Through August 19, 2021, the SBA disbursed approximately $280 billion in COVID EIDL loans and grants. This equates to a fraud rate of nearly 30 percent within the program.
Additionally, in a response to a letter sent by Ranking Member Luetkemeyer, the SBA stated that 1.1 million EIDL applications have been flagged for identity theft concerns.
More EIDL data can be found here.
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