The U.S. Small Business Administration announced suspensions of 111,620 California borrowers tied to roughly $8.6 billion in suspected PPP and EIDL fraud. The suspensions bar those borrowers from new SBA programs while investigations proceed and will be coordinated with law enforcement for recoveries and prosecutions.

The Small Business Administration announced on Feb. 6, 2026 that it has suspended 111,620 California borrowers and 118,489 PPP/EIDL loans linked to an estimated $8.6 billion in suspected pandemic-era loan fraud. The agency said the action follows a statewide review and that suspended borrowers are temporarily barred from accessing new SBA programs while investigations continue. The suspension authority will be coordinated with federal law enforcement and other agencies to pursue civil recoveries and criminal prosecutions where appropriate. The SBA characterized the step as a targeted, administrative measure to protect taxpayer funds and to prevent further misuse of relief programs, while preserving investigative leads for prosecutors. California officials pushed back immediately, raising concerns about due process for small businesses and the potential impact on legitimate borrowers. The SBA said it will provide additional case-specific information to investigators and work with state partners to refine lists and reduce false positives. The announcement underscores ongoing enforcement attention to pandemic-era relief programs and the scale of alleged fraud identified in post-disbursement reviews.