(Adam Andrzejewski, RealClear Wire) The Small Business Administration sponsored the Economic Injury Disaster Loan program during the pandemic to help small businesses get temporary loans to help weather tough times. Now, the SBA Inspector General is investigating whether the SBA is not trying to collect on loans under $100,000, which amounts to $72 billion.
Despite clearly telling borrowers the loans awarded would have to be repaid, “the SBA has faced growing concerns about its ability to collect the full sums it is owed,” the Washington Post reported.
Now there is speculation that the agency has stopped pursuing collections on smaller loans, with SBA Inspector General investigating the up to $72 billion.
This comes on the heels of countless potentially fraudulent loans from both the EIDL and Paycheck Protection Programs, which according to The Post have cost “tens of billions of dollars.” The latest estimate of just PPP fraud coming in at $80 billion.
Some in Congress are pushing for more oversight, with Sen. Joni Ernst, R-Iowa, ranking member of the Small Business Committee, writing a letter to the SBA demanding information about the EIDL Program and the SBA potentially forgoing collections of smaller EIDL loans.
A spokesperson for the SBA told the Washington Post that official agency policy “continues to be to collect on every loan.”
Those that borrowed EIDL loans knew that they were obligated to pay these loans back, and the SBA needs to aggressively pursue collection of these repayments to ensure taxpayers don’t take the hit for delinquent payments.
