Reforms will end loans to illegal aliens, children, and deceased
Today, the U.S. Small Business Administration (SBA) highlighted several new verification measures within its loan application process to strengthen protections against fraud and ensure its programs only benefit eligible American small business owners.
The changes were implemented with the help of the Department of Government Efficiency (DOGE), which last month uncovered new abuse of SBA’s loan programs – including over $630 million in loans made to applicants over the age of 115 and under the age of 11, according to data from the U.S. Social Security Administration.
Key changes to combat fraud within the SBA’s loan programs include:
- Citizenship Verification: All SBA loan applications now include a citizenship verification provision to ensure only legal, eligible applicants can access SBA programs. Lenders are required to confirm that applicant businesses are not owned in whole or in part by an illegal alien, consistent with President Trump’s executive order(Link is external) ending the taxpayer subsidization of open borders.
- Date of Birth Verification: All SBA loan applications now include a process to verify applicant age and date of birth. This provision will mitigate fraud stemming from applicants using an identity other than their own, including those of children or the deceased.
- Automatic Fraud Alerts: SBA’s date of birth verification process will automatically flag any applicant claiming to be younger than 18 or older than 115 years of age.
“With the help of DOGE, the SBA has already made a number of common-sense reforms to prevent the rampant fraud we’ve seen over the last four years,” said SBA Administrator Kelly Loeffler. “Unlike the previous Administration, we respect the American taxpayer and are dedicated to ensuring every dollar entrusted to this agency goes to support eligible, legitimate small businesses. With these simple fraud prevention measures, we will end the abuse of our loan programs – with stronger safeguards to hold bad actors accountable.”
Under the last administration, lax guardrails allowed illegal aliens, children and the deceased to apply for and receive approval for SBA assistance:
- In June 2024, the SBA approved a $783,000 loan application for a small business that was 49% owned by an illegal alien. In February, an internal SBA audit identified the illegal status of the individual and halted the loan from being disbursed – ensuring that $0 was distributed to the business.
- DOGE found(Link is external) that from 2020-2021, the SBA issued more than 3,000 loans worth $333 million to borrowers over 115 years old according to the Social Security database.
- DOGE also identified(Link is external) over 5,500 SBA loans totaling about $300 million that were disbursed to children under 11 years old during the same time period.