Some 870,000 borrowers linked to suspected COVID-era fraud will never access SBA loans again.
Vice President JD Vance announced Monday that the federal government is permanently shutting those borrowers out of future Small Business Administration lending. The crackdown targets people tied to alleged abuse of the Paycheck Protection Program and the Economic Injury Disaster Loan program, two pandemic-era relief efforts designed to keep businesses and workers solvent during the COVID-19 crisis.
The administration says the flagged borrowers were connected to as much as $39 billion in allegedly fraudulent loans.
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Vance did not mince words about what happened. As it happens with so many of the programs that are born out of the generosity of the American taxpayer, we had many, many people who took advantage of those programs,” he said. People who decided to steal from the American taxpayer, steal money that was supposed to go to small businesses and American workers as well.
His warning to future offenders was equally blunt. “If you screw the American taxpayer, the government is now gonna say you’re cut off, no more.”
As originally reported, the SBA spent much of 2026 conducting state-by-state reviews of PPP and EIDL borrowers, suspending tens of thousands of recipients tied to suspected fraud and referring questionable loans for collection or possible prosecution. The agency also sent hundreds of thousands of suspected fraudulent loans worth billions of dollars to the Treasury Department for collections.
Federal prosecutors have kept up the pressure on the criminal side as well. Cases have been brought against applicants accused of inventing employees, fabricating payroll records, and creating fake businesses solely to collect relief money.
Attorney General Todd Blanche spotlighted one particularly striking case. A defendant was accused of creating dozens of phony businesses while running just one legitimate company called “Fur Lives Matter.”
The broader enforcement push is a centerpiece of the Trump administration’s agenda. Pandemic fraud has become one of its highest-profile targets, and Monday’s announcement signals the administration intends to keep the pressure on. For nearly 870,000 borrowers, the door to future federal small business lending is now closed for good.
