More Minnesota Madness: SBA Now Stepping In to Block Borrowers Over Suspected Fraud
What in the world is going on in Minnesota?
Whatever the truth of the matter is, it’s got the full attention of President Donald Trump’s administration.
Late Thursday, the Small Business Administration announced a blistering response to “thousands of potentially fraudulent pandemic-era PPP [Paycheck Protection Program] and EIDL [Economic Injury Disaster Loan] loans approved in Minnesota.”
SBA Administrator Kelly Loeffler took to X to announce the news:
Over the last week, SBA has reviewed thousands of potentially fraudulent pandemic-era PPP and EIDL loans approved in Minnesota.
Today, our agency took action to suspend 6,900 Minnesota borrowers amid suspected fraudulent activity. In total, these borrowers were approved for…
— Kelly Loeffler (@SBA_Kelly) January 2, 2026
“Today, our agency took action to suspend 6,900 Minnesota borrowers amid suspected fraudulent activity,” Loeffler posted.
“In total, these borrowers were approved for 7,900 PPP and EIDL loans worth approximately $400M.
“These individuals will be banned from all SBA loan programs, including disaster loans, going forward. We will also refer every case, where appropriate, to federal law enforcement for prosecution and repayment.
“After years, the American people will finally begin to see the criminals who stole from law-abiding taxpayers held accountable – and this is just the first state.”
This announcement comes amid larger scrutiny targeting the Gopher State, as Minnesota has been embroiled in fraud scandals under the leadership of Democratic Gov. Tim Walz.
Walz, who is facing a congressional hearing over his purported malfeasance, had already drawn the ire of Loeffler and the SBA earlier this week.
“The scope of this international scam is still unknown, likely in the billions,” Loeffler told conservative influencer Benny Johnson over earlier various allegations of fraud, including day cares that were collecting funds despite an alleged lack of children and services provided.
Loeffler continued, “Pending further review, SBA is freezing all grant funding to the state in order to stop the rampant waste of taxpayer dollars and uncover the full depth of fraud.”
According to Fox News, Loeffler already sent a scathing letter to Walz.
She wrote, “I am notifying you that effective immediately and until further notice, the SBA is halting the disbursement of federal funds to SBA resource partners operating in the state of Minnesota, totaling over $5.5 million in annual support.”
With hundreds of millions in taxpayer-backed loans now under suspicion, thousands of borrowers suspended, and grant funding frozen statewide, the Trump administration is signaling that Minnesota’s fraud problem is no longer being treated as an isolated lapse — but as a systemic failure demanding accountability.
Whether this marks the beginning of a broader reckoning or a political and legal showdown with Walz, one thing is clear: Minnesota is no longer flying under Washington’s radar.
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