Although the promise of the PPP was that if borrowers used the funds correctly, their loans would be forgiven, 6% of borrowers are being told they need to repay part of their PPP loans. About half of borrowers have not yet completed the forgiveness process. Some problems stem from the speed at which the program was rolled out, resulting in several updates to SBA’s guidance, applications, and forgiveness processes.
Meanwhile, a new report finds that as much as $3.6 billion in PPP loans were made to ineligible businesses, among other types of fraud in COVID relief programs. Nearly $87 billion in fraudulent unemployment payments will be made by the end of September, and $918 million in Economic Injury Disaster Loans may have been made to ineligible businesses.