SBA Warns Businesses to Watch Out for These New Scams

Almost everyone knows not to click on the email from a far-away prince promising your millions of dollars for a small payment is a scam–if you didn’t, now you do. But under the guise of the pandemic, con artists are now targeting small businesses that are looking for loans, according to the U.S. Small Business Association (SBA). 

“The Office of Inspector General recognizes that we are facing unprecedented times and is alerting the public about potential fraud schemes related to economic stimulus programs offered by the U.S. Small Business Administration in response to the Novel Coronavirus Pandemic (COVID-19)...,” the association says in a report. “Fraudsters have already begun targeting small business owners during these economically difficult times.”

Be on the lookout for fake communications from the SBA

Remodelers and home improvement pros already have to be adept at dodging dodgy requests for convoluted payment plans, avoiding overpayment scams, and sniffing out unbelievable sob stories from a client’s legitimate unforeseen life circumstances. Though the remodeling industry has been bouncing back after the initial bump due to the pandemic, spotting this new kind of scam is imperative for small businesses seeking government assistance to avoid being conned by fake offers of grants, loans, or other communications from those impersonating the SBA. 

The National Association of Home Builders says that one of its members experienced an incidence of fraud when they received a letter regarding a loan they did not apply for. Law enforcement was notified, and the case is under investigation. 

“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 in the interim, suspect fraud,” the SBA says in guidance about potential scams. Other tell-tale signs include agents initiating contact with businesses as the “SBA does not initiate contact on either 7a or Disaster loans or grants.” 

Fake grants, dodgy loans, and phising emails

If fake loans and grants are not enough, another sneaky way scammers are duping victims is with phishing emails. The goal of many of these attacks is to steal your personal information or install harmful malware onto your computer. The SBA recommends doubling checking the account number listed is yours and that the communication is coming from an account ending in sba.gov. The SBA logo is not a guarantee that the email or letter is an official communication, especially if it’s distorted, stretched, or otherwise does not look right. 

Using common sense and these tips can help keep your business safe from attacks. If in doubt, the SBA says to report any suspected fraud.