SBA Hot Topic Tuesday: SBA Halts Minnesota SBDC Funding in Response to Somali PPP and EIDL Loan Fraud
SBA has responded to the evolving Somali loan fraud scandal by immediately halting funding for the following Minnesota state programs:
- Small Business Development Centers (SBDCs): Annual federal awards totaling $2,223,327
- Women’s Business Centers (WBCs): Annual federal awards for 3 WBCs totaling $450,000
- SCORE: Annual federal awards totaling approximately $300,000
- SBA Microloan Program: All microloan awards totaling $2,604,144 in FY25
- Federal and State Technology (FAST) Partnership Program: All reimbursements totaling $94,420 in FY25
- SBA Growth Accelerator Fund Competition (GAFC): All awards totaling $150,000 in FY25
In a letter to Governor Tim Walz, SBA Administrator Kelly Loeffler writes:
“The SBA has uncovered at least $2.5 million in Paycheck Protection Program (PPP) and COVID Economic Injury Disaster Loans (EIDL) that were granted to individuals indicted as part of the Somali fraud scheme.”
“We identified another 13,600 PPP loans in Minnesota, totaling about $430 million, that were initially flagged by SBA as fraudulent but later funded — and in many cases forgiven — under the Biden Administration.”
“The volume and concentration of potential fraud is staggering, matched in its egregiousness only by your response to those who attempted to stop it. What happened in Minnesota is the consequence of socialist policies deliberately designed to pump welfare funding without oversight or accountability. SBA will not further that agenda by continuing to send funds to a state that has demonstrated a reckless refusal to enforce the law.”
The Fallout
The immediate impact of the SBA’s funding halt in Minnesota falls most heavily on the state’s Small Business Development Centers and Women’s Business Centers. These centers do not make loans, approve credit, or distribute capital. Instead, federal funding is used almost entirely for operating overhead and personnel, including counselor salaries, benefits, training, rent, data systems, and required reporting infrastructure.
SBDC support is now paused, directly affecting the statewide network hosted by the Minnesota Department of Employment and Economic Development and its university partners:
- Bemidji State University SBDC
- Central Lakes College SBDC (Brainerd)
- Metropolitan State University SBDC (Twin Cities)
- Minnesota State University, Mankato SBDC
- Minnesota State University Moorhead SBDC
- Minnesota State College Southeast SBDC (Winona / Red Wing)
- Northland Community & Technical College SBDC (Thief River Falls / East Grand Forks)
- Southwest Minnesota State University SBDC (Marshall)
- St. Cloud State University SBDC
- University of Minnesota Duluth SBDC
- University of Minnesota Crookston SBDC
Also affected are the 3 Women’s Business Centers located in Minneapolis, St. Paul, and Rochester.
Construction Loan Closing Documentation and Draw Administration: Meeting the SOP Requirements with Perfection — Webinar 1/7
Closing a construction loan is one of the most complex—and high-stakes—transactions in SBA lending. Even minor documentation errors can delay funding, cause upstream and downstream disruptions, or result in costly post-closing corrections. This focused training equips SBA lenders, closing specialists, and construction managers with the tools and knowledge to execute flawless construction loan closings and draw administration that fully comply with the SBA’s SOP.
Join Coleman construction risk management expert Kyle Gustafson as he walks through the key documents, timelines, and risk factors lenders must manage to keep projects on track—and SBA guarantees protected.
Using Microsoft Copilot for SBA 7(a) Credit Memos: How to Turn Numbers into Narrative — Webinar 1/14 & 1/29
Coleman Report presents a live webinar tailored for Microsoft Copilot users to show SBA professionals exactly how to use Copilot and related AI tools to interpret borrower financial statements, calculate financial ratios, and generate lender-ready cash flow narratives that align with SBA 7(a) underwriting standards.
Whether you are beginning to explore Copilot or already using it to automate parts of underwriting, this session will give you practical knowledge and tools to incorporate Copilot into your SBA credit memo process — efficiently and responsibly.
Top 10 SBA 7(a) Loan Closing Mistakes Closers Make, And How to Avoid Them — Webinar 1/15
Are your SBA 7(a) closings getting delayed, repaired, or worse, stripped of the guaranty after funding? Every year lenders lose real money and credibility because basic closing errors are discovered too late, often during SBA review or liquidation. These are not complex credit issues. They are preventable closing mistakes that quietly undermine otherwise solid loans.
This session is designed for loan closers, processors, credit analysts, underwriting reviewers, and SBA operations professionals who are responsible for getting loans closed correctly the first time. You will leave with practical guidance, disciplined closing habits, and a clearer understanding of what the SBA expects in today’s environment. If you close SBA 7(a) loans, this training is not optional. It is essential.
2026 Annual SBA Loan Portfolio Servicing Actions: SBA 7(a), 504 and PPP Loans — Webinar 1/22
Now is the time for your annual assessment of your SBA loan portfolio to protect your institution’s loan guarantees while providing thoughtful, compliant solutions that help your borrowers manage cash flow. Even the best servicing teams can struggle with the complexities of SBA requirements and failure to act at the right time can dramatically increase the risk of costly repairs or even denial of the SBA guaranty.
Join us for this critical 2026 webinar designed specifically for SBA lenders and servicers who want to sharpen their servicing performance, stay compliant with SBA requirements, and reduce portfolio risk.
Call for Nominations: Coleman’s 2026 SBA Lender Professional Awards
Nominations are still open for Coleman’s 2026 SBA Lender Professional Awards! These prestigious awards recognize outstanding SBA lending professionals and companies that have made significant contributions to the small business lending community.
Nominate a colleague or yourself to be honored for your exceptional work in SBA lending, and help celebrate the positive impact you or your nominee has had on small businesses across the nation.
Coleman Certified SBA 7(a) Loan Underwriting 2026 Training First Session Begins January 20, 2026
The Coleman SBA 7(a) Certified Underwriter Training Program enters 2026 following a complete rebuild. The structure is redesigned. The curriculum is expanded. Production quality has been elevated. New instructors have been added. Every element is engineered to help SBA credit professionals master the intricate requirements of producing a defensible, banker-ready credit memo.
The urgency for training has never been higher. SBA credit is entering a new regulatory era. Program guidance continues to shift. SBA has eliminated the “do what you do” rule. SBA, regulators, and credit committees now expect a higher standard of risk assessment and clearer, more disciplined explanations supporting credit approval.
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