We prepared this memorandum to provide the Small Business Administration (SBA) information regarding lessons learned and risks identified in prior audits and reviews that SBA should consider to ensure program integrity and mitigate the risk of financial loss for COVID-19 related loans.
The President signed the Coronavirus Aids, Relief and Economic Security (CARES) Act into law on March 27, 2020. The Act contains several provisions intended to provide economic relief to our nations small businesses. One of the Act’s largest provisions created the Paycheck Protection Program under section 7(a) of the Small Business Act. This program provides $349 billion in fully guaranteed SBA loans, which can be forgiven if used properly, for small businesses to cover payroll, rent, utility payments, and other limited uses.