SBA program fraud: What you should know

  • March 30, 2021

Like most people, fraudsters pay attention to news headlines. Last year, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help Americans negatively affected economically by the COVID-19 pandemic. The act included financial resources to help small businesses keep their workforces employed during these challenging times.

Cybercrooks unfortunately saw this as an opportunity to gain access to personally identifiable information (PII) of program applicants. The Office of Inspector General recently issued an updated warning to businesses so they can stay alert to these schemes.

Here’s what you need to know to avoid falling victim to this growing crime.

SBA program fraud red flags

Scammers deceive small businesses by pretending to represent the U.S. Small Business Administration (SBA), which is in charge of the business-related leg of the CARES Act. Their goal is to get you to reveal your sensitive information so they can access your private banking details or install malicious software on your computer.

Their tactics include:

  • Requesting your program application number via fake email correspondence that appears to be from the SBA. Fraudsters use the SBA logo to make their emails look legitimate. These logos might also appear on the phony web pages they invite you to access by clicking on a hyperlink in the email.
  • Sending emails from addresses with a variation of @sba.gov, such as @gov-sba.us. Some may even come from a private email address.
  • Initiating contact with promises to secure SBA loan approval if you provide them with a payment upfront. They may also offer a high-interest loan to tide you over until the SBA loan is approved.
  • Offering to act as a third-party loan broker to assist you with the application process, while charging fees higher than what the SBA allows. Genuine brokers may charge a borrower up to 3% for loans in the amount of $50,000 or less, and 2% for loans between $50,000 and $1,000,000, with an additional 0.25% on amounts over $1,000,000.
  • Presenting themselves as an SBA expert or other government employee who can assist you with your application for a fee. Federal agencies are prohibited from charging fees to assist applicants.

How to avoid SBA program scams

There are several ways you can confirm whether a communication is actually from the SBA:

  • If you’re in the process of applying for SBA funds and receive correspondence that asks for your personal information, make sure the referenced application number matches the application number you have in your records.
  • Personal information includes your full name, date of birth, social security number, address, phone numbers, email addresses, and case numbers.
  • Do not rely on the SBA logo to confirm authenticity. Scammers use the logo in their communications and on fake web pages as part of their scheme.
  • Only communicate with email addresses ending in @sba.gov.
  • Avoid clicking on any links or opening attachments you receive that you were not expecting.
  • Double-check the information you receive with the information available at www.sba.gov.

If you have questions or are unsure if a communication is legitimate, contact the SBA directly by calling 800-659-2955 or sending an email to [email protected].

For Bank of Missouri SBA customers, your communication will primarily come from your lender or the bank. Those email addresses will end in @bankofmissouri.com. If you are ever unsure about an email you receive, you can contact the bank or your lender to verify legitimacy.

Report suspected fraud

If you suspect SBA program fraud, report it to the Office of Inspector General’s Hotline at 800-767-0385 or online at https://www.sba.gov/about-sba/oversight-advocacy/office-inspector-general/office-inspector-general-hotline.

At The Bank of Missouri, we are committed to the success of local businesses as they navigate the coronavirus situation.

Live Well, Bank Well