How Small Businesses Can Avoid Economic Stimulus Scams

The Small Business Administration recently issued a warning about scammers trying to take advantage of people applying for small business loans. Here's what you need to know.

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The coronavirus pandemic and the shutdowns it caused did significant financial harm to many small businesses across the United States. The economic stimulus programs offered in the months that followed presented a lifeline to many business owners. Unfortunately, it also created an opportunity for scammers.

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Concerned that scammers might be taking advantage of people in this time of financial crisis, the Small Business Administration issued a set of tips for anyone looking to detect loan fraud before it happens. Here is a breakdown of how they apply to construction business owners:

Loans

  • If someone contacts you promising to get approval of an SBA loan but requires any form of payment upfront, suspect fraud. 
  • If someone contacts you promising to get approval of an SBA loan and offers a high interest bridge loan in the interim, suspect fraud.

Phishing

  • If you receive an email asking for private information while applying for an SBA loan, check that the referenced application number is the same as your actual application number.
  • Scammers may use the SBA logo in emails in attempt to learn your private information. Just because someone is using official iconography does not mean they are legitimate.
    • Any legitimate email communication you receive from the SBA will come from an email account ending in “sba.gov”.
  • Likewise, an illegitimate webpage may also contain an SBA logo. Cross reference any communication you receive to be sure you are not being scammed.

It’s an unfortunate reality that people are taking advantage of this financially fraught time to try and scam business owners. The National Association of Home Builders recently revealed one of its members was approached in one such scam, receiving a letter purportedly from the SBA about a loan the member had not applied for. Law enforcement is investigating, the NAHB said.

Any suspected scams or fraudulent activity can be reported directly to the Office of the Inspector General here.