Scammers are preying on small business owners looking for financial assistance to help survive the shutdowns during the coronavirus (COVID-19) pandemic.
The Office of Inspector General has reported an increase in grant and loan frauds and phishing email scams falsely claiming to be a part of the U.S. Small Business Administration (SBA) economic stimulus programs. The schemes are on the rise after the federal government last month approved the Coronavirus Aid, Relief and Economic Security Act that includes economic stimulus programs for small businesses.
Officials recommend small business owners be extra cautious and outlined the following tips:
1. The SBA does not reach out to offer loans or grants.
Officials said the SBA does not initiate contact to begin a loan or grant process. If you are contacted by someone claiming to be from the SBA offering application assistance, it is probably fraud.
2. The SBA does not guarantee loan approval for an upfront fee.
If someone reaches out and promises a loan approval for an upfront payment, it is probably fraud. Officials said, along with not guaranteeing loan approval, the SBA also limits broker fees to 3% for loans under $50,000, 2% for loans from $50,000 to $1 million, and an additional .25% on amounts more than $1 million. They said broker fees more than these amounts are not allowed.
3. Phishing email scams are using the SBA logo for false credibility.
Be on the lookout for emails stating to be from the SBA as there have been phishing email attempts to obtain personally identifiable information (PII) or install ransomware or malware on computers. Officials said any email from the SBA has an address ending in sba.gov. Another thing to look for if you are applying for a loan is to make sure any email communication from the SBA references your correct application number.
4. Report suspected fraud.
Small business owners who think they may have been targeted by scammers should report the suspected fraud. The schemes can be reported to the Office of Inspector General hotline at 800-767-0385 or online.
Unfortunately, small business owners haven’t been the only ones targeted with scams during the coronavirus pandemic. Scammers also have been attempting to cash in on coronavirus stimulus checks to steal PII and money as well as have increased their attempts to steal personal and business data from employees working from home.