Small Business Administration says 6,900 Minnesota borrowers suspended over suspected fraud

"In total, these borrowers were approved for 7,900 PPP and EIDL loans worth approximately $400M," SBA Administrator Kelly Loeffler said

By Natalia Mittelstadt

Published: January 2, 2026 7:42am

Small Business Administration Administrator Kelly Loeffler said that 6,900 Minnesota borrowers were suspended over suspected fraud.

"Over the last week, SBA has reviewed thousands of potentially fraudulent pandemic-era [Paycheck Protection Program] and [Economic Injury Disaster Loan] loans approved in Minnesota," Loeffler posted on X on Thursday. "Today, our agency took action to suspend 6,900 Minnesota borrowers amid suspected fraudulent activity. In total, these borrowers were approved for 7,900 PPP and EIDL loans worth approximately $400M. These individuals will be banned from all SBA loan programs, including disaster loans, going forward.

"We will also refer every case, where appropriate, to federal law enforcement for prosecution and repayment. After years, the American people will finally begin to see the criminals who stole from law-abiding taxpayers held accountable - and this is just the first state."

The announcement of the suspension comes as the House Committee on Small Business launched an investigation into “fraud and concealment” within PPP and EIDL, programs that were established during the COVID-19 pandemic.

On Monday, Loeffler said she was pausing SBA's annual funding to Minnesota while it investigates $430 million in suspected Payment Protection Program fraud across the state.

She sent a letter to Minnesota Gov. Tim Walz (D) last week, saying that SBA would pause $5.5 million in annual funding “pending further review.”

Nearly 100 people linked to an investigation of fraud within Minnesota’s social programs have been charged by prosecutors, and Walz has directed a third-party audit of Medicaid billing within his state's Department of Human Services.

The U.S. Department of Health and Human Services said earlier this week that it would pause all child care payments to Minnesota, citing a video posted by independent journalist Nick Shirley, outlining his investigation into fraud allegations in the state’s day care centers and other businesses.