Economic Stimulus Programs and Fraud – What Business Owners Should Know

Due to the availability of emergency assistance programs provided by the Small Business Administration in response to the Coronavirus pandemic, there has been a surge of fraud schemes attempting to obtain personally identifiable information (PII). These scammers impersonate the SBA and its Office of Disaster Assistance through grant fraud, loan fraud and phishing. The Small Business Administration has expressed concern about scam emails targeting applicants of the Economic Disaster Loan Program and Coronavirus Aid, Relief, and Economic Security Act (CARES Act), where scammers attempt to steal personally identifiable information through third party platforms.

If you, like many other business owners, have interest in taking advantage of recent financial relief programs, look at these tips provided by the SBA regarding grants, loans and phishing to avoid being subject to fraud schemes.

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Watch Out for Phony Emails Asking for Your Information

Any email communication from the SBA comes from accounts ending in sba.gov, and nothing more. Also be aware of emails using the SBA logo in phishing emails and schemes. The presence of an SBA logo on a webpage or email does not guarantee the information is accurate or endorsed by the SBA.

Grants – The SBA does not initiate contact for 7a, Disaster Loans, or Grants

If you are proactively contacted by someone claiming to be from the SBA, suspect fraud.

Government Employees Do Not Charge for Recovery Assistance

The SBA and federal agencies providing recover assistance will never ask for a fee or payment to apply for financial assistance. What to watch out for:

  • Grant applicationNever provide your full name, date of birth, social security number, address, phone numbers, email addresses, case numbers or any other PII in response to third-party emails.
  • Loan applicants who receive email correspondence asking for personally identifiable information are cautioned to ensure application numbers referenced are consistent with your actual application number.
  • Do not open links or attachments, which are often placed in fraudulent emails.

Loans – Be aware of upfront payments and high interest rates

If you are contacted by someone promising to get approval of an SBA loan but requires any payment up front or offers a high interest bridge loan, suspect fraud. Additionally, SBA limits the fees a broker can charge a borrower to 3% for loans $50,000 or less and 2% for loans $50,0-00 to $1,000,000 with an additional .25% on amounts over $1,000,000. Any attempt to charge more than this could indicate fraud.

The best practice for protecting yourself and your business is to be weary of who you give your information to. Be vigilant when pursuing financial assistance and protect personal and business information with the highest of importance. If you suspect you are a target of fraudulent schemes connected to the SBA, you can report it online at https://www.sba.gov/COVIDfraudalert, or contact your local Stockman Bank for more information on what to do.

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