April 2010

SBA Warns Small Businesses of Scams to Help Obtain Government Loans

From Journal of Accountancy.

The U.S. Small Business Administration (SBA) warned that the agency has received several complaints from small businesses about abusive marketing practices, scams and exorbitant fees charged by companies offering to help businesses get a loan, grant or other federal funds from the SBA. Complaints received by the SBA’s Office of the Inspector General (SBA OIG) include:

• Companies charging small businesses high fees to provide assistance applying to SBA funding programs. Some companies allegedly guaranteed that the small business would obtain SBA funding if they paid the fee. The SBA does not endorse or give preference to specific private companies or their clients.
• Companies charging small businesses for services never requested after the small business gave bank account and routing information to a caller claiming to be a company offering assistance.
• Companies alleging that a small business would be issued a “forfeiture letter” that would make the small business ineligible for any SBA funding for three years if the small business refused to use the company’s services.

Read more.