The Treasury Department and Small Business Administration have not yet forgiven any of the 5.2 million emergency coronavirus loans issued to small businesses and need to do more to combat fraud, government watchdogs told Congress yesterday, the Washington Post reported. Small businesses that received Paycheck Protection Program funds, as well as their banks, have been frustrated by the difficulty in applying for loans to be forgiven, despite rules saying that if the funds are spent mostly on payroll they will not need to be paid back. SBA announced last week that it had received only 96,000 loan applications — less than 2 percent of the total number of loans — and has not processed any applications so far. Treasury and SBA officials have said they plan to begin considering applications shortly. SBA officials say they opened the system for forgiveness Aug. 10, two days after the program closed. The agency has 90 days to consider each application after it receives bank approval, according to the CARES Act. The agencies also need to do much more to prevent fraud, according to two watchdogs who testified at a House hearing Thursday. The SBA Inspector General’s office has received tens of thousands of fraud tips, and federal officials have launched hundreds of investigations into allegations of people creating fake businesses and stealing identities to fraudulently obtain SBA funds.
