These are real stories from real people who trusted the SBA and got burned. Names have been changed, but the rage is 100% authentic.
I'm an accountant. I keep immaculate records. When I applied for my EIDL, I submitted a 47-page document package that included everything they could possibly need: five years of tax returns, monthly profit and loss statements, bank statements organized by quarter, a spreadsheet tracking every business expense since 2017, and a notarized letter from my CPA confirming everything was accurate.
Three months later, I got a denial. The reason? "Unable to verify business information due to excessive documentation." I called to ask what that meant. The rep said, and I quote, "Your application had too many pages. It confused our system."
Let me make sure you understand this: I was denied a loan because I provided TOO MUCH proof that my business was legitimate. Meanwhile, fraudsters who submitted nothing but a fake name and a stolen Social Security number got approved in 48 hours. I asked if I could resubmit with fewer documents. They said my application was "permanently closed" and I'd have to wait for the next funding round. There was no next funding round.
I applied for an EIDL increase in early 2022. Got the standard "we'll review your application" email. Then nothing for six months. When I finally got through to a human being, she told me my application had been denied because I was deceased.
"I'm not dead," I said. "I'm talking to you right now."
"According to our records, you passed away in March 2021," she replied.
"I definitely did not."
"Sir, I can only go by what's in the system."
It took me four months to prove to the SBA that I was, in fact, alive. I had to get a letter from the Social Security Administration confirming my continued existence. I had to submit a notarized affidavit swearing under penalty of perjury that I was not a ghost. I had to do a video call where I held up my driver's license and a copy of that day's newspaper. Even then, the agent said she'd "have to escalate to verify." I asked escalate to whom. She said, "The people who handle undead claims."
My application was eventually approved eight months later. By then my business had already closed. So I guess in a way, they were right. Something definitely died.
In 2020, someone used my identity to apply for an EIDL loan. I never saw a penny of that money. The fraudster got $87,000 and disappeared. I didn't even know about it until 2023, when I got a letter from the Treasury Department saying they were garnishing my wages.
I filed a fraud report with the SBA immediately. I filed a police report. I filed with the FTC. I did everything you're supposed to do. The SBA acknowledged that the loan was fraudulent. They have it in writing. They know I didn't apply for it. They know I didn't receive the funds.
They're still garnishing my wages. When I ask why, they say the fraud investigation is "ongoing" and until it's "resolved," collections continue. When I ask when it will be resolved, they say they can't give me a timeline. When I ask who is responsible for the investigation, they transfer me to someone else.
I've lost over $12,000 in garnishments so far for a loan I never applied for, never received, and that the SBA admits was fraud. My lawyer says I have a case, but it could take years to resolve. Meanwhile, my paycheck is getting smaller every month because someone at the SBA can't figure out how to stop collecting on a loan they know is fake.
I was assigned a loan officer named "Jennifer Martinez." I have the email with her name, her direct phone number, and her email address. For eight months, I tried to reach Jennifer Martinez. I called her direct line hundreds of times. Straight to voicemail, every time. I sent emails. Never got a reply. Not even an auto-response.
Finally, I asked a rep on the main line to check if Jennifer Martinez actually existed. She put me on hold for 45 minutes. When she came back, she said, "I can confirm that Jennifer Martinez is listed in our directory."
"But does she actually work there?" I asked.
"She's listed in the directory."
"That's not what I asked."
Long pause. "Sir, I'm not authorized to confirm or deny whether employees exist."
I eventually found a former SBA employee on LinkedIn who told me that "Jennifer Martinez" was a placeholder name they used when loans were assigned to automated processing. There was no Jennifer. There never was a Jennifer. My application was being "handled" by a script that didn't work, and no human being ever looked at it. I was waiting eight months for a callback from a robot that doesn't make phone calls.
I have three separate approval letters for my EIDL loan. Three. Each one is signed by a different person, has a different date, and lists a slightly different loan amount. The first one said I was approved for $63,000. The second said $58,500. The third said $71,200. I kept all of them because I knew this was going to get weird.
Despite being "approved" three times, I never received any money. When I called to ask why, each rep gave me a different answer. Rep #1 said my approval was "pending final verification." Rep #2 said my approval had been "rescinded due to duplicate applications" (I only applied once). Rep #3 said there was no record of any approval and I must have received phishing emails.
I showed Rep #3 the approval letters. They came from official SBA email addresses. They have official SBA letterhead. They contain my actual loan number. She said, "I can't verify the authenticity of documents." I asked how I was supposed to verify them. She said, "You'd need to speak with your loan officer." I asked who my loan officer was. She said she couldn't see that information.
I've been "approved" more times than most people and received exactly zero dollars. At this point, the approval letters are just expensive toilet paper.
The SBA asked me to submit a copy of my business license. I uploaded it to the portal. Two weeks later, they said they never received it. So I uploaded it again. They said the file was corrupted. I converted it to a different format and uploaded it a third time. They said it was received.
A month later, I got a letter saying my application was incomplete because I hadn't submitted my business license. I called. The rep said, "We see that you uploaded it digitally, but we need you to mail the original." I asked where in the instructions it said I needed to mail the original. She said it was "standard procedure."
Fine. I mailed a certified copy to the address she gave me. Two months later, I got another letter saying they never received it. I have the certified mail receipt. I have the tracking number. The USPS confirmed it was delivered and signed for.
When I provided this evidence, the SBA said, "Our mailroom sometimes misplaces documents. You'll need to send another copy." I asked if there was a different address. She said no. I asked if I could hand-deliver it. She said no. I asked if I could fax it. She laughed.
I've now "mailed" my business license four times. Each time, they confirm they lost it. I'm starting to think their mailroom is a black hole and my business license is orbiting a singularity somewhere in the space-time continuum.
This one is so absurd I had to triple-check that it actually happened to me. I got a denial letter for my EIDL increase. The reason given was "unverifiable information." I called to appeal and was placed on hold. After about two hours, my phone buzzed with an email notification. While still on hold, I checked it. It was an approval letter for my EIDL increase. Same loan number. Same amount I'd requested. Approved.
I stayed on hold anyway because I wanted to understand what happened. When a rep finally picked up, I told her I'd been denied but was now apparently approved. She looked at my file and said, "Yes, I see the denial here." I said, "But I also have an approval dated twenty minutes ago." Long pause. "Let me check."
She came back after ten minutes. "It looks like your application was processed twice by two different systems. One denied you, one approved you. They ran simultaneously."
"So which one is correct?" I asked.
"Both of them are in the system."
"That's not possible. They're contradictory."
"Sir, I don't make the rules."
It took another three months to get someone to remove the denial and confirm the approval was real. During that time, I received collection notices for the denied loan and funding documents for the approved loan. Schrödinger's EIDL: simultaneously denied and approved until someone at the SBA opens the box.
I paid off my entire EIDL loan. Every single payment, on time, for three years. I have the receipts. I have the confirmation emails. I called to get my final payoff amount, paid it to the penny, and got a "congratulations, your loan is paid in full" message in the portal.
Six months later, I get a letter from the Treasury Department. They're coming after me for $47 in "unpaid interest" that accrued between my final payment and when they processed it. I tried to pay it immediately. The portal said I had no balance. I called customer service. They said I was paid in full. I explained about the Treasury letter. They said it must be a mistake.
It wasn't a mistake. Because I "failed to respond" to their collection notices about this phantom $47, they reported my loan as delinquent to all three credit bureaus. My credit score dropped 127 points. I lost a mortgage refinance I was about to close on. All over $47 that their own system said I didn't owe. When I finally got someone to admit the error, they said it would take "6 to 8 weeks" to correct the credit report. That was five months ago.
I applied for an EIDL loan in 2020 for my landscaping business. Got approved for $50,000. The money hit my account. Great. Except three days later, another $50,000 showed up. Same loan number. Obviously an error. I immediately called the SBA to report it and return the duplicate payment.
Want to guess how long it took them to accept their own money back? Fourteen months. I spent fourteen months trying to give them $50,000 that wasn't mine. I sent certified letters. I made dozens of phone calls. Each time, I was told something different. "We can't accept payments on this account." "There's no record of a duplicate deposit." "You'll need to speak to your loan officer." My loan officer, naturally, never responded.
During those fourteen months, they charged me interest on both deposits. When they finally "discovered" the error, they sent me a bill for $53,247. Not just the duplicate $50K, but over $3,000 in interest and fees. When I pointed out that I'd been trying to return it since day one, they said my documentation wasn't sufficient. I have 76 pages of emails, certified mail receipts, and call logs. Still not sufficient, apparently.
Here's a fun catch-22 the SBA set up for me. I applied for an EIDL increase in summer 2021. They said they needed my 2019 tax transcripts. No problem, I filed my taxes every year like a responsible business owner. I submitted the 4506-T form.
Weeks go by. I get a denial letter. Reason: "Unable to verify tax information." I called. They said the IRS had no record of my 2019 return. That's impossible, I said. I filed electronically, I have the confirmation, I even owe money on that return. The rep said, and I quote, "We can only go by what the IRS tells us."
I contacted the IRS. They confirmed my return was on file, processed, and in good standing. I got a tax transcript directly from the IRS and uploaded it to the SBA portal. Denied again. This time the reason was "applicant-provided documents cannot be accepted for verification purposes." So the SBA can only accept information from the IRS. But when the IRS confirms the information, the SBA won't accept it because it came from me.
My accountant has been doing taxes for 30 years. He said he's never seen anything like it. "It's like they designed a system specifically to make verification impossible," he told me. I think he's right.
I've uploaded the same driver's license to the SBA portal seventeen times. I have screenshots of every upload, with timestamps, file names, and confirmation messages. Every single time, within a week or two, I get an email saying "Action Required: Please upload your government-issued photo ID."
I've tried different file formats. JPEG. PNG. PDF. I've tried different file sizes. I've tried uploading from different browsers. I've tried uploading from my phone instead of my computer. The result is always the same. Upload confirmed. Then: document missing.
When I call to complain, the reps always say the same thing: "I see that your documents were uploaded, but they don't appear to have been accepted by the system." When I ask why, they don't know. When I ask how to fix it, they say to upload again. When I tell them I've uploaded seventeen times, there's just silence on the line.
My application has been "pending document verification" for 27 months. At this point, my driver's license has expired and I've had to get a new one. I wonder if they'll accept this one. I'm guessing no.
My father had a small printing business for 35 years. He took an EIDL loan in 2020 to keep it running when his commercial clients stopped ordering. He used every penny for payroll and rent, exactly as intended. He died of a heart attack in January 2023, still running the business, still making loan payments.
I'm his only heir. I contacted the SBA to report his death and figure out what to do with the loan. They said they'd put a hold on collections while the estate was processed. Six months later, I discovered they'd been garnishing his Social Security survivor benefits that go to my mother, who's 72 years old and was listed as a secondary borrower on paperwork she signed without fully understanding.
My mother doesn't understand why the government is taking money from her checks. She keeps asking me what my father did wrong. I've tried explaining that he did nothing wrong, that the SBA is just incompetent and cruel. But she doesn't believe me. In her mind, if the government is punishing you, you must have done something.
The printing business closed when Dad died. There's nothing left. No assets, no inventory, nothing. They're squeezing a 72-year-old widow for a business loan on a business that no longer exists, owned by a man who's been dead for two years. This is what the SBA calls "servicing."
I still have the email. Friday, 4:47 PM: "Congratulations! Your EIDL modification has been approved." There was a new loan amount, a new payment schedule, everything looked official. I forwarded it to my accountant, my wife, my business partner. We went out to dinner to celebrate. First good news in months.
Monday, 9:15 AM: "Your EIDL modification has been declined." Same loan number. Same application ID. No explanation for why an approved loan was suddenly denied over a weekend when their offices were supposedly closed.
I called immediately. The rep said he could see both emails in my file but couldn't explain what happened. He said it looked like "someone had made a mistake." When I asked if they could honor the approval since it was their mistake, he laughed. Not meanly, just... he actually laughed. "Sir, that's not how it works here."
I asked to speak to whoever made the Friday approval. He said he couldn't identify that person. I asked to speak to whoever made the Monday denial. He said he couldn't identify that person either. I asked if anyone at the SBA is identifiable. He put me on hold and never came back.
I have a legitimate, documented $200,000 EIDL loan. I've been making payments on it for three years. I have bank statements showing the payments leaving my account. I have confirmation emails from the SBA acknowledging each payment. I have a current balance that correctly reflects all my payments.
But according to the SBA's "new system" that they migrated to last year, I don't have a loan at all. When I log into the portal, it says I have no accounts. When I call customer service, they can't find my loan number in their system. When I provide my SSN and EIN, nothing comes up.
I've been told, variously, that: my loan was "archived incorrectly," my account is "in a transition state," my information was "lost during the system upgrade," and my loan "might be in a batch that hasn't been migrated yet." It's been fourteen months since the migration.
Here's the terrifying part: I'm still making payments. The payments are still being accepted. But I have no way to verify my balance, no way to access my account, and no documentation from their side that my loan even exists. If they decide to come after me claiming I never paid, I have no way to prove otherwise through their systems. I'm just hoping my bank statements and old emails will be enough. I'm not optimistic.
I'm a freelance graphic designer. In 2019, I had income from two sources: my main design LLC and some contract work I did through a friend's marketing agency. All completely legal, all properly reported on my taxes, all documented with 1099s and W-2s.
When I applied for an EIDL, the SBA's "fraud detection" algorithm flagged me because my income came from multiple sources. I got a letter saying my application was "under review for potential fraud indicators" and asking me to verify my identity in person at a local SBA office.
Fine, I thought. I'll clear this up. I went to the office with my tax returns, my business license, my contracts, my bank statements, everything. The person at the desk looked at my documents, nodded, and said she'd forward them for review. That was August 2021.
In December 2023, I got a letter saying my application was denied due to "unresolved fraud concerns." When I called to ask what concerns, they said my identity verification was never completed. When I pointed out I'd done it in person two years ago, they said they had no record of that visit. When I asked for the name of the person I'd met with, they said they couldn't provide that information for "security reasons."
So now I'm apparently a fraudster in their system, despite having done everything they asked, because their own records don't exist. My actual fraud indicators? Having the audacity to work two legitimate jobs.
I was assigned a loan officer for my EIDL increase. Let's call him "John." I got an email with his name and contact info. For the next four months, I tried to contact John. I called every other day and left voicemails. I sent polite emails once a week. I heard nothing. Not a single reply.
When I called the main SBA line, every single rep told me the same thing: "I'm sorry sir, I can't help you. Your file has been assigned to a loan officer and only they can access it." I would explain that my loan officer was a ghost, that he didn't exist. They'd just repeat the same robotic line. I felt like I was in a Kafka novel. My case was locked in a phantom's desk drawer and no one had the key.
My application was eventually withdrawn for being "inactive." They said I failed to respond to their requests. The irony is so thick it makes me want to vomit. I lost my business because the SBA hired a ghost to process my file.
We ran a small event venue. When the Restaurant Revitalization Fund was announced, it was a lifeline. We applied on day one. A few weeks later, the impossible happened: we got an approval email. Approved for over $300,000. It was in the portal. It was real. We cried.
Based on that approval, we made promises. We signed a new lease. We called back our old employees and promised them jobs. We booked new acts and paid deposits. We were following the rules, obligating the funds just like they told us to.
The money never came. Weeks turned into a month. Our portal status went from "Approved" back to "Under Review" with no explanation. When we called, they told us the RRF was tied up in lawsuits and all funding was frozen. But we had already spent money we didn't have, based on THEIR legal approval. They knowingly sent out approval letters, let us dig our own graves, and then just shrugged. That approval didn't save us; it was the final nail in our coffin.
I swear my application was a hamster wheel. They needed my 2019 tax transcripts. I uploaded them. A month later, "Action Required: Please upload your 2019 tax transcripts." Okay, maybe a glitch. I uploaded them again. Another month. "Action Required: Your file is unreadable." So I saved it as a different file type, triple checked it, and uploaded it again.
Then they needed a new 4506-T form. Signed it, sent it. Then they said the signature was in the wrong place. Then they said I filled out the wrong year. This went on for eighteen months. Every time I fixed one thing, they found another. It felt intentional. Like their job wasn't to process loans, but to find any excuse, no matter how small, to kick the can down the road until you just give up from sheer exhaustion. I finally did. They didn't deny me. They just wore me down until I ceased to exist.
I applied for an EIDL increase in early 2021 after being told by three separate SBA reps that I was eligible. Submitted all my documents, updated my 4506-T, tax returns, even my birth certificate just to be safe.
After three months of silence, I sent a follow-up email saying it was “urgent” due to my business nearing collapse. A week later, I got a denial letter claiming I was “abusive to staff.” That was the only email I ever sent.
I filed three appeals. Denied. I contacted my Senator. Ignored. The final rejection came with a subject line: "Application Closed. Do Not Respond." I never got funding, and my shop went under.