The "Assisting Small Businesses Not Fraudsters Act" prevents individuals and businesses convicted of financial fraud related to COVID-19 relief programs from receiving future Small Business Administration (SBA) financial assistance. This ensures that SBA resources are directed towards legitimate small businesses and not those who have defrauded relief programs.
Roger Williams
Representative
TX-25
The "Assisting Small Businesses Not Fraudsters Act" prohibits the Small Business Administration (SBA) from providing financial assistance to individuals and businesses convicted of financial misconduct related to COVID-19 relief programs. This includes those convicted of making false statements to obtain covered loans or grants. The prohibition excludes assistance under section 7(b) of the Small Business Act and does not apply to contracts or agreements entered into before the enactment of this law.
| Party | Total Votes | Yes | No | Did Not Vote |
|---|---|---|---|---|
Republican | 217 | 205 | 0 | 12 |
Democrat | 215 | 200 | 0 | 15 |
New Bill Bars COVID-19 Relief Fraudsters from Future SBA Assistance
The "Assisting Small Businesses Not Fraudsters Act" aims to do exactly what it says: prevent individuals and businesses convicted of defrauding COVID-19 relief programs from getting any more money from the Small Business Administration (SBA). This isn't about minor mistakes; it targets those finally convicted of financial misconduct or making false statements related to pandemic relief funds. This includes crimes related to loans and grants, and it applies after any appeals process has been completed.
Blocking the Bad Guys
This bill closes a major loophole. Previously, someone could be convicted of ripping off a COVID-19 relief program and still be eligible for other SBA loans. Now, if a business owner, a major shareholder (owning more than 20%), or even a key employee is convicted of COVID-19 relief fraud, the entire business becomes ineligible for most future SBA assistance. The bill specifically defines "associate" broadly, covering officers, directors, key employees, and anyone holding significant control (20% or more ownership).
Real-World Shutdown
Imagine a restaurant owner who inflated their payroll numbers to get a bigger Paycheck Protection Program (PPP) loan. If they're convicted, not only are they on the hook for the fraud, but their restaurant—and any other business they're significantly involved in—can't get future SBA loans or certain types of assistance. The same goes for a contractor who lied about their business size to get a larger Economic Injury Disaster Loan (EIDL). This bill ensures one bad actor can't jeopardize an entire business's access to legitimate SBA programs. The prohibition applies to convictions related to COVID-19 loans under section 7(a)(36) or (37) and 7(b) of the Small Business Act, grants under section 5003 of the American Rescue Plan Act of 2021, and grants under section 324 of the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act. (SEC. 2)
Not Everything's Covered
There's a notable exception: assistance under section 7(b) of the Small Business Act isn't covered by this ban. Section 7(b) deals with disaster loans, which could still be available. Also, this law only applies to convictions that become final after the bill is enacted. Anyone convicted before the law passes is still in the clear for future SBA help, which may raise eyebrows. The bill also doesn't specify what happens if someone tries to transfer ownership to get around the "associate" rule, presenting a potential challenge for enforcement.