One of the Small Business Administration’s biggest challenges in the coming year is how it’ll service its now massive loan program — and ensure it recovers as much as possible from fraudulent loans.
That’s the determination of the SBA Office of the Inspector General, which serves as an independent watchdog for the agency. It said in its annual report released Oct. 15 that prior to the Covid-19 pandemic, the SBA typically serviced about 263,000 disaster loans totaling about $9.4 billion.
But today, the agency is servicing about 2.5 million disaster loans totaling $283 billion — a more than ninefold increase.
That’s because of the massive number of Covid-19 Economic Injury Disaster Loans the agency made from 2020 through 2022, in which it processed about 4.1 million loans for roughly $390 billion. On top of that, the SBA typically services a disaster loan until it is paid in full or up until default at 180 days, but for Covid EIDL loans, it struck a deal with the Treasury Department to serve even defaulted loans for up to two years.
