Avoid Small Business Lending Scams and Fraud Related to COVID-19

Avoid Small Business Lending Scams and Fraud Related to COVID-19

Avoid Small Business Lending Scams and Fraud Related to COVID-19

With nearly $400 billion on the line between the Economic Injury Disaster Loans (EIDL) and the Paycheck Protection Program (PPP), I guess it shouldn’t be a surprise that there would be fraudsters targeting small business owners during these already challenging times. Avoiding small business lending scams and fraud related to COVID-19 requires that you are diligent and on the lookout for grant fraud, loan fraud, and phishing scams.

Scams and Fraud Schemes to Be Aware Of

The SBA offers some guidance regarding how they work and what activities should throw up a red flag warning you that you should suspect fraud.

Grant Fraud Schemes

  • The SBA does not contact individual businesses on either 7(a) loans or disaster loans or grants. If anyone contacts you claiming to be the  SBA, suspect fraud. Don’t share any personal or business information with them.

Loan Fraud Schemes

  • If you are contacted by anyone promising you an SBA loan approval, but requires payment up front or offers a high-interest bridge loan in the interim, suspect fraud. The SBA does not guarantee approval before an application is submitted and reviewed.
  • Any attempt to charge a borrower fees in excess of 3% is likely fraud. The SBA limits fees a broker can charge to 3% for loans of $50,000 or less and 2% for loans of $50,000 to $1 million. Loans over $1 million will include an additional ¼% or 2-¼%.

Phishing Schemes

  • If you are in the process of applying for an SBA loan and receive an email asking for Personally Identifiable Information (PII), make sure the referenced application number is consistent with the actual application number.
  • Don’t assume that something with the SBA logo must be legit. These phishing attacks may be attempts to  obtain you PII to gain access to your bank accounts or to install ransomware/malware on your computer.
  • Make sure any email correspondence claiming to be from the SBA is from the SBA. Every email from the SBA will come from accounts ending in sba.gov.
  • The presence of the SBA logo on a webpage does not guarantee it is endorsed by the SBA. Verify and cross-reference any information you receive with information available at www.sba.gov.

Reporting Suspected Small Business Lending Scams and Fraud

As we learn more about ne’er-do-well’s efforts to defraud small businesses in these challenging times, we’ll continue to update you on what you need to be aware of. Unfortunately, we advise you to look at anything that seems too good to be true with a skeptical eye—the potential for business lending scams and fraud related to COVID-19 can’t be ignored. As the situation changes over the coming weeks and month, we promise to be as accurate and candid as possible with the information we share at Nav.com to help you make informed decisions about your options as you consider financing to help you weather the coronavirus storm.

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Please report any suspected fraud to the SBA’s Office of the Inspector General. You can report your concerns via email HERE, or by telephone at 800-767-0385.

Please keep in mind this information is changing rapidly and is based on our current understanding of the programs. It can and likely will change. Although we will be monitoring and updating this as new information becomes available, please do not rely solely on this for your financial decisions. We encourage you to consult with your lawyers, CPAs and Financial Advisors. To review your real-time funding options with one of Nav’s lending experts, please contact us.

This article was originally written on April 1, 2020 and updated on April 6, 2020.

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ABOUT AUTHOR

Ty Kiisel

Ty Kiisel

Ty has been writing about small business and the business finance topics that impact a business’ bottom line for almost 20 years. With over 35 years in the trenches as a Main Street business evangelist, author, and marketing veteran, he makes the maze of small business finance accessible by weaving personal experiences and other anecdotes into a regular discussion of some of the biggest challenges facing small business owners today.

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2 responses to “Avoid Small Business Lending Scams and Fraud Related to COVID-19

  1. I am trying to find out if the email I received is a FRAUD!!

    This is the email.
    Ernestine Scott,

    If you have not already please respond to this email.

    Thank you!

    From: Liberty SBF | PPPLoans@LibertySBF.com
    To: Ernestine Scott, tina@scottatlanta.com
    Subject: Congratulations – PPP Loan Approved!

    Dear Applicant,

    Congratulations – Your loan LSBF1023089 has been approved by the SBA under the CARES Act PPP Loan Program! Your SBA E-TRAN Loan Number is 3728627707.

    Please reply to this email to confirm you received this information and understand our instructions. Also, provide us with the best phone number to get in touch with you by replying directly to this email IMMEDIATELY. We cannot call you directly.

    In order to fund your loan, you must provide all items in our checklist and forms.

    Download checklist by clicking here: https://bit.ly/ChecklistLibPPP

    We have also created a PDF to walk you through the process, please take your time to carefully review and reference the PDF to ensure that you have completed everything correctly.

    Download walkthrough by clicking here: https://bit.ly/PPPWalkThrough

    Again, please reply to this email ASAP to confirm you have received the information above.

    Note: Failure to provide these items as required under the CARES Act will result in the inability to fund your loan.

    Once we are in touch with you and receive these items for review, a team member will be able to provide you with the closing paperwork for your review and signature via DocuSign. The funding of your loan will take place by Celtic Bank.

    Best of Luck,

    The Liberty SBF Team*
    On behalf of Celtic Bank

    Privacy Policy | Terms of Use

    *Liberty SBF is acting as an Agent for Celtic Bank as it relates to your PPP loan application.
    LibertySBF_logo_ppp_sig-1.jpg

    Copyright © 2020 Liberty SBF
    ppploans@libertysbf.com | http://www.LibertySBF.com | 866-345-4352

    This email was sent to tina@scottatlanta.com
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    Liberty SBF · 1500 John F Kennedy Blvd · Suite 250 · Philadelphia, PA 19102 · USA

    This email was sent to
    tina@scottatlanta.com

    why did I get this?
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    Liberty SBF · 1500 John F Kennedy Blvd Ste 250 · Philadelphia, PA 19102-1753 · USA

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    WHERE CAN I GET HELP!!!

    1. Ernestine, did you apply with Liberty SBF or Celtic Bank? Celtic Bank is a legit bank so you can reach out to them to confirm whether or not this is real.