COVID-19 RELIEF AND RECOVERY
VIGILANCE URGED WHEN DEALING WITH
COVID-19 ECONOMIC RELIEF PROGRAMS
10
BY TY KIISEL
TCBusiness.com
With nearly $400 billion on the line between
the Economic Injury Disaster Loans
and the Paycheck Protection Program, I
guess it shouldn’t be a surprise that there
would be fraudsters targeting small business
owners during these challenging
times. Avoiding small business lending
scams and fraud related to COVID-19
requires you to be diligent and on the
lookout for grant fraud, loan fraud and
phishing scams.
The Small Business Administration offers
some guidance on how scams and fraud
schemes work and what activities should
throw up a red flag, warning you about
possible fraud.
GRANT FRAUD SCHEMES
• The SBA does not initiate contact on
either 7a or disaster loans or grants. If you
are proactively contacted by someone
claiming to be from the SBA, suspect
fraud.
• Don’t share personal or business information
with them.
LOAN FRAUD SCHEMES
• If you are contacted by anyone
promising you SBA loan approval, but
requiring payment up front or offering 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 of more than
$1 million will include an additional ¼%,
or 2¼%.
PHISHING SCHEMES
• If you are in the process of applying for
an SBA loan and receive an email asking
for personally identifiable information,
make sure the referenced application
number is consistent with the actual application
number.
• Don’t assume that something with
the SBA logo must be legitimate. These
phishing attacks may be attempts to
obtain your personal identifiable information
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 crossreference
any information you receive with
information available at www.sba.gov.
REPORT SUSPECTED SCAMS, FRAUDS
The Florida Small Business Development
Center at Indian River State College advises
a business owner 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. Over the coming
weeks and months the Florida SBDC
at IRSC will make every effort to provide
the most current and accurate information
as possible, helping business owners and
operators make informed decisions and
weather the coronavirus storm.
Please report any suspected fraud to
the SBA’s Office of the Inspector General.
You can report your concerns by calling
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. The Florida SBDC at
IRSC encourages you to consult with your
lawyers, certified public accountants and
financial advisers. v
Frank Fink began his 48 year career in
financial and operations management
serving with the United States Air Force as
an auditor. Following his military service
Fink began his corporate work with Florida
Power & Light in their nuclear power division.
After 24 years with FP&L, Fink went on
to serve with other energy companies, in
their nuclear divisions, including the Tennessee
Valley Authority, Commonwealth
Edison and Exelon Energy. Throughout his
career, Fink served in numerous financial
and operations management positions,
where his responsibilities included: business
planning, accounting and financial
control functions, business operations,
strategic planning, supply chain management,
information systems management,
project management, estimating
and scheduling. Fink holds degrees and
certifications from Indian River Community
College, Barry and Villanova University.
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