The Small Business Administration may have shuttered its disaster loan program in early May, but legal action could still be launched against fraudsters for the next decade if a new bill is passed into law.  ​​

The House Committee on Small Business in June passed a suite of bills, some of which would address loopholes exploited by fraudsters who took advantage of the SBA's breakneck pace at doling out Covid-19 relief loans.

Two bipartisan bills seek to extend the statute of limitations--or the window in which charges and other enforcement action can be brought--to 10 years for a pair of pandemic relief programs: the Paycheck Protection Program and the Covid-19 Economic Injury Disaster Loan (EIDL) program. If passed, the bill would double the amount of time that some fraudsters can be prosecuted.

In other words, if a borrower took out a fraudulent EIDL at the start of 2022, then the government could bring legal action against that same borrower in early 2032. Since PPP ended in May 2021, legal action against PPP fraudsters would extend to 2031 if the bill makes it into law.

Early on, the SBA did not have basic safeguards set up to address fraud in the EIDL program and the PPP, Representative James E. Clyburn (D-S.C.) said during a Tuesday hearing on pandemic relief program fraud.

"Criminals and criminal organizations took advantage of Americans' suffering during this crisis and committed substantial fraud against these critical pandemic relief programs, stealing billions of dollars in aid," Clyburn in his statement.

So if you're a business that borrowed funds from either of these programs, it would make sense to hang onto any relevant loan records in case of an audit. Lynn Ozer, the president of MultiFunding, a financial services company based in Ambler, Pennsylvania, says that could include invoices and receipts of what you paid for with the loan proceeds. You might also keep a copy of payroll or expense documents that show what money was spent on. Ozer adds that businesses can always return funds that they haven't used as well. 

The bill still has a long ways to go before becoming law, including a full House vote, additional hearings or revisions, and a compatible version in the Senate--assuming that it makes it that far.