Last month, the federal government enacted a $2 trillion federal relief package – the Coronavirus Aid, Relief, and Economic Security Act – to help offset financial difficulties faced as a result of the COVID-19 pandemic.
The CARES Act includes the Paycheck Protection Program, a $350 billion effort to offer loans to small businesses to help keep their employees employed, as well as additional Economic Injury Disaster Loan funding.
As the SBA implements this program, here are some things small business owners should be aware of as you apply for loans or other financial relief to keep scammers and fraudsters from compounding your financial pain:
• Don’t be fooled by phishing attempts. The SBA has noted that it does not initiate contact on either 7a or disaster loans or grants, so if you are contacted by someone claiming to be from the SBA about these funds, it is likely a scam.
• You do not need to pay any fees to receive these relief payments and loans, and no one can speed up the time it takes for you to receive the payment. Anyone making such offers to you is a scammer.
• Don’t fall for lending scammers. If you’re working to get a relief loan, be careful of scammers disguised as lenders who come out of the woodwork and claim to be able to help you get the loan you need. Stick to local banks or lenders you’ve worked with before or are already familiar with, get recommendations from people you trust, or contact any federally insured bank, federally insured credit union, or Farm Credit System institution to find out if they are participating.
• If you receive an email or correspondence that asks for your Personally Identifiable Information (PII) related to an SBA loan application, be sure that the email is legitimate. Review the sender’s email address (legitimate communications will come from sba.gov) and make sure the referenced PII number matches the one you have on record.
• Watch out for debt negotiation or debt settlement scams. Avoid companies or out-of-state lawyers that offer to eliminate or cut your debts, including your tax debt, by negotiating with your creditors or the IRS – they often charge large fees and may leave you even deeper in debt. Under North Carolina law, it’s illegal to collect any upfront fee for debt settlement services – don’t pay these fees and question any company that charges them.
Visit the SBA’s resource page or N.C. Department of Commerce for more guidance related to COVID-19 response.
[Matthews-Mint Hill Weekly works hard to bring you local news.
Please consider making a small financial donation to help us add value to our community.]
Become a CMG Insider! Subscribe to our weekly email newsletter to stay on top of everything we are publishing in print and online, as well as what we’re sharing across our social media platforms. Click here to be added to the distribution list.