S. 1047 would clarify that small businesses with associates who are convicted of falsely receiving financial assistance from the Small Business Administration (SBA) for programs related to COVID-19 are ineligible for future financial assistance. Under current law, those people are already ineligible for future funding from the SBA.
The SBA currently requires applicants for loans and grants to disclose whether they are being investigated for or have been convicted of defrauding a federal agency. In addition, the agency uses federal databases to identify applicants previously convicted of fraud and provides lenders with pre-approval screening to detect fraud before financial assistance is awarded.
Because the SBA already reviews applications to verify that applicants who have falsely received assistance do not receive additional federal assistance, CBO estimates that implementing S. 1047 would have insignificant costs. Any related spending would be subject to the availability of appropriated funds.
The CBO staff contact for this estimate is Aurora Swanson. The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.
