The findings, released Tuesday by the SBA’s inspector general, underscored how the emergency funds from the government designed to combat a once-in-a-century pandemic became a magnet for fraudsters. At least 17% of the $1.2 trillion distributed by the SBA was wasted in fraud, the report found. To put it another way: The SBA paid out approximately 4.5 million potentially fraudulent loans and grants, amounting to 21% of the total 22.1 million loans and grants that were disbursed.
While the program successfully helped many companies pay workers during the pandemic, it was plagued by questionable lending and rampant fraud. Both the SBA and lenders were under incredible pressure to get a massive amount of money out within a matter of weeks when the pandemic first hit.