Home Fraud checks and errors slow small-business relief loans.

Fraud checks and errors slow small-business relief loans.


When the Paycheck Protection Program began last year, the Trump administration — eager to get money out the door as quickly as possible — eliminated most of the safeguards that normally accompany business loans. With applications approved almost instantly, thieves and ineligible borrowers siphoned billions of dollars from the $523 billion the program distributed last year.

In December, Congress approved $284 billion for a new round of lending, including second loans to the hardest-hit businesses. This time, the Small Business Administration was determined to crack down. Instead of immediately approving applications from banks, it held them for a day or two to verify some information.

That caused — or exposed — a cascade of problems. Formatting applications in ways that will pass the agency’s automated vetting has been a challenge for some lenders, and many have had to revise their technology systems almost daily to keep up with adjustments to the agency’s system. False red flags, which can require time-consuming human intervention to fix, remain a problem.

The problems can be even more complicated for applicants seeking second loans who flew through the process the first time despite errors that are being discovered only now.



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