WASHINGTON, D.C. (February 6, 2026) — The U.S. Small Business Administration has suspended 111,620 California borrowers amid suspected fraudulent activity across its pandemic-era loan programs.
The borrowers received 118,489 Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) totaling over $8.6 billion.
The action was announced by SBA Administrator Kelly Loeffler following a visit to San Diego.
“Once again, the Trump SBA is taking decisive action to deliver accountability in a state whose unaccountable welfare policies have created a culture of fraud and abuse at the expense of law-abiding taxpayers and small business owners,” said SBA Administrator Kelly Loeffler. “Today, we announced we have suspended nearly 112,000 borrowers tied to at least $9 billion in suspected fraud. This staggering number represents the most significant crack-down on those who defrauded pandemic programs, and it illuminates the scale of corruption that the Biden Administration tolerated for years. As we did in Minnesota, we are actively working with federal law enforcement to identify the criminals who defrauded American taxpayers, hold them to account, and recoup the stolen funds. As we continue our state-by-state work, our message is clear: pandemic-era fraudsters will not get a pass under this Administration.”
Suspended borrowers are prohibited from executing new small business and disaster loans and are not eligible for other SBA programs such as federal contracting in the 8(a) Business Development Program.
The California suspensions follow a similar action in Minnesota, where the SBA suspended 6,900 borrowers associated with 7,900 potentially fraudulent PPP and EIDL loans worth approximately $400 million.
Since Day One, the Trump SBA has worked to crack down on an estimated $200 billion in pandemic era-fraud that went unaddressed during the Biden Administration. The agency recently partnered with Palantir to expand the nationwide investigation into PPP and EIDL abuse, and continues to coordinate with federal law enforcement partners to pursue recoveries, civil penalties, and criminal sentences where appropriate. The agency will also continue to partner with the SBA Office of Inspector General (OIG) to pursue additional potential fraud in California and in states across the nation.
This article was drafted with the aid of Grok, an AI tool by xAI, under the direction and editing of Robert Cox to ensure accuracy and adherence to journalistic standards.