FTC Warns Small Businesses of Loan Scams

The U.S. Federal Trade Commission (FTC) warned small business owners who still need financial assistance due to setbacks from the coronavirus pandemic to be wary of email loan scams that appear to come from the Small Business Office of Disaster Assistance, WPXI reports.

The email scams claim businesses are eligible for a loan of up to US$25,000 and ask business owners for personal information, such as their birthdate and Social Security number. According to the FTC, government entities will not email or call owners to offer a loan or request personal information.

Many small businesses suffering the effects of the coronavirus pandemic have been desperate for financial assistance, with some receiving Paycheck Protection Program (PPP) loans from the Small Business Administration (SBA) when they were first made available in the spring. However, many were not able to secure PPP loans the first time and have relied on other loans. Fortunately, the PPP loan program reopened earlier this month.

Any businesses owners who suspect they replied to a fraudulent email should check their credit report to make sure no one has taken out a loan in their name. The FTC offers other cautions for small business owners:

• Do not click on unsolicited links in emails received about loan applications
• Check out lenders before sharing personal information
• Apply directly for loans through the PPP; the deadline is March 31 or when money runs out
• Always start at the official SBA site or reach out directly to a participating financial institution.