SBA Inspector General Warns of ‘Widespread’ Fraud in COVID-19 Loan Program

According to the U.S. Small Business Administration Office of the Inspector General, potential fraudsters have obtained $250 million in federal funds intended to help businesses survive the impact of COVID-19.

The Inspector General also identified $45.6 million in potentially duplicate payments and warned that with well over $220 billion left to give out, rapid changes were needed.

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UPDATE: SBA Extends PPP Loan Payback Safe Harbor Provision Deadline (Again!) to May 18

Since our post yesterday, the SBA has once again updated the safe harbor deadline for paying back Paycheck Protection Program loans to Monday, May 18.

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UPDATE: Too Little, Too Late? SBA Updates Guidance on PPP Safe Harbor the Day Before May 14 Deadline

**UPDATE 5/14/20: Since publication of this post, the SBA has now updated the PPP Safe Harbor deadline to May 18. This post has been updated to include this additional information.

Just hours before the first extended May 14 deadline for businesses to return “unnecessary” Paycheck Protection Program loans without penalties, the SBA has published new guidance on how it will review borrowers’ required good-faith certifications.

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PPP Update: New $20 Million PPP Loan Limit for Corporate Groups

On Monday, May 4, the SBA will issue another Interim Final Rule updating the Paycheck Protection Program—this time limiting the “aggregate amount of PPP loans that any single corporate group may receive.”

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PPP Loan Payback? Safe Harbor Provision Lets Companies Pay Back “Unnecessary” Loan Money

**Update 5/6/2020: As of May 5, the SBA updated its PPP FAQ’s, announcing its intention to extend the PPP Safe Harbor period to May 14. This post has been updated to reflect this change.

***Update 5/14/2020: As of May 14, the SBA updated its PPP FAQ’s once again, announcing its intention to extend the PPP Safe Harbor period to May 18. This post has been updated a second time to reflect this change. The SBA has also supplemented its guidance on the Safe Harbor Provision, as discussed here.

If you’re a parent, you might be familiar with the SBA and Treasury Department’s current strategy to crack down on businesses taking Paycheck Protection Program funds when they don’t qualify: if ineligible businesses ‘fess up and return the money by May 14, nobody gets in trouble.

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