Tuesday, November 29, 2022
News for Independent BusinessFTC Warns of New Loan Scams for Business Owners

FTC Warns of New Loan Scams for Business Owners


While many business owners are contemplating getting a new loan from the Small Business Administration (SBA), loan scams are already working hard to get your personal information. After new money was made available in the Paycheck Protection Program (PPP), the Federal Trade Commission (FTC) is warning business owners that scammers are sending out emails that pretend to be from the SBA.

An Email Scam

The email is hoping to catch business owners that are interested in getting a loan from the SBA. The recently passed stimulus plan added additional money into the PPP and the agency is now accepting applications for loans. The emails claim to be from the “Small Business Administration Office of Disaster Assistance” and it offers a “personal/business loan of up to $250,000.”

The scam says that all that is needed is for you to submit some basic information. This involves, of course, your social security number, birth date, and a couple of other bits of personal information. The email also claims that you are already eligible.

While it sounds too good to be true, you can be certain that it is. The SBA does not send out emails to people that never requested more information about its loan programs. Also, it will never approve a loan without requiring some serious details about your business and its finances.

Business owners – and everyone else – should never open what appears to be a suspicious email. It could cause you to download a virus, a keyword logger, other malware, or cause you to surrender personal information.

Website Scams

Besides the email scam just mentioned, several websites make false claims about offering SBA loans. The website will claim to be working with the SBA and may even have the official SBA seal on them

The websites will claim that they offer SBA loans or that they can enable you to get an SBA loan faster. These scam websites encourage people to apply now and get help from their SBA lending experts. You can avoid being scammed by these websites by only applying at the official SBA website (sba.gov).

Other Loan Scams

The FTC is warning business owners to keep an eye on your credit report. If any loan scams already have some of your personal information, they may have applied for a loan in your name. Your credit report will reveal the loans you have – even if you are not aware of them. Unfortunately, some people have creditors calling them to collect money on loans they did not even know they had. A scammer simply took out a loan in your name with some of your personal information. You can get a credit report from each of the three credit bureaus once a year for free at www.annualcreditreport.com.

Applying for an SBA Loan

If you want to get an SBA loan, you should go directly to the SBA website. This way you can be sure that it is not a scam and that you are providing your information in the right place.

The SBA has announced that it is now accepting First Draw Loans as of January 11, 2021. The last day for applying is March 31, 2021.

The money must be used within an 8- to 24-week period in order for the loan to be completely forgiven. Also, the money needs to be used for salaries and benefits (60%) and the remaining 40% must be used for mortgage or rent payments, utilities, PPE equipment, property that was damaged during riots in 2020, and some necessary supplies.

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