I’ve said this a few times above but I’ll say it here. The funds are unused because the SBA threatened to criminal prosecute borrowers for obtaining loans when “they had alternative capital”. Lots of businesses owners worried that if they had home equity or credit cards available that would be “alternative capital” and they would go to jail.

After the SBA guidance application volume dropped off a cliff so the SBA, backpedaling, issued new guidance that they wouldn’t audit loans under $2M, but by then no one wanted to take the risk.