The U.S. Small Business Administration (SBA) announced new verification requirements designed to combat fraud in its loan programs. The reform ensures that only eligible American small businesses benefit from federal aid.
The changes were implemented with the help of Elon Musk’s Department of Government Efficiency (DOGE), which discovered systemic fraud involving ineligible applicants. DOGE found over $630 million in fraudulent loans paid out 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 the SBA’s loan program include:
- Citizenship Verification: All SBA loan applications include a citizenship verification requirement to ensure that only eligible applicants can access federal funding. The lender must confirm that the applicant’s businesses are not owned, either wholly or partially, by a non-U.S. citizen.
- Date of Birth Validation: Along with citizenship verification, all SBA loans require all applicants to verify their age and date of birth. This initiative aims to stop fraud, including identity theft of deceased individuals or children.
- Automatic Fraud Alerts: The SBA is implementing an automated system to flag applicants who submit applications claiming to be under 18 or older than 115.
“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. “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.”
The SBA’s implementation of new verification requirements marks a significant step in safeguarding federal loan programs from fraud. By enforcing a more rigorous verification process, the agency is protecting taxpayer dollars and ensuring adequate funds to safeguard American businesses and support American entrepreneurs.
