The Federal Trade Commission and Small Business Administration are warning about Paycheck Protection Program (PPP) loan promises made by companies touting a special relationship with the SBA. The FTC and SBA sent letters to six companies that have made promises that they could accelerate the PPP loan process to order them to stop.
Warning about PPP loan promises
The agencies sent letters to disasterloanassistance.com, SBADisasterLoan.org, USAfunding.com, SBALosAngeles.com, Madison Funding Partners, which operates madisonfundingpartners.com, and NYMBUS.com. The letters ordered the six companies to address the agencies' concerns within 48 hours and make remediation for harm done to small business owners as a result of their claims.
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The FTC and SBA said the companies may be misleading small business owners by telling them they can apply for a PPP loan on their website. Some of the companies are using the SBA's name or logo on their websites and even listing their address as the SBA's office in Washington, D.C. They said the companies may also be making promises about easy applications for PPP loans and fast approvals.
The agencies said these six companies may be convincing small business owners that they are somehow affiliated with the SBA or have a special relationship with the SBA. They may also be misleading business owners about their role in helping them apply for PPP loans. Thus, they warn that business owners who applied for PPP loans based on the promises from the six companies may end up empty-handed.
Applying for SBA loans
These six companies aren't the only ones that have made misleading PPP loan promises. The FTC and SBA sent more letters to companies making such promises about PPP loans last month.
The FTC offered some tips for small business owners who want to apply for PPP loans or other loans from the SBA. The best way to learn about the loans offered by the SBA as part of the coronavirus relief efforts is to go to the agency's website here. The SBA has information about other loan and debt relief options here.
The FTC advises small business owners not to apply for a loan without verifying the lender. Only lenders that have been authorized by the SBA can provide loans under the PPP program. Other SBA loans may be secured directly through the agency itself. The SBA also offers this tool to help small business owners locate an authorized lender in their area.
The FTC also advises small business owners to be careful when it comes to companies that promise to facilitate or expedite their PPP loan application. The agency also warned about companies that claim to have some kind of special relationship with the SBA.
Those who believe they were misled by PPP loan promises or about any other SBA loan program can report the incident to the FTC here.