The U.S.
Small Business Administration is warning small businesses to use caution if
they are contacted by firms offering to help them apply for funds available
through SBA programs.
The U.S.
Small Business Administration is warning small businesses to use caution if
they are contacted by firms offering to help them apply for funds available
through SBA programs.
SBA and
SBA's Office of the Inspector General have received several complaints from
small businesses about abusive marketing practices, scams, and exorbitant fees
charged by firms offering to help them obtain a loan, grant, or other federal
funds.
Some of
these complaints include:
Firms charging small businesses high fees
to provide assistance applying to SBA funding programs. Some firms allegedly guaranteed that the
small business would obtain SBA funding if they paid the fee. SBA does not endorse or give preference to
specific private companies or their clients
Firms charging small businesses for
services never requested after the small business gave bank account and routing
information to a caller claiming to be a firm offering assistance. SBA
recommends that small businesses never provide social security numbers, bank
account information, or credit card numbers to anyone; and, never over the
telephone.
Firms 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 firm's services.
When
electing to use a third party to apply for SBA funding programs, small
businesses should also bear in mind:
Small businesses can get free assistance
in person or by calling one of the administration's district offices and from
information on SBA's Web site. They can also get assistance from
Small Business Development Centers (SBDC), Women's Business Centers, Veterans Business Outreach Centers and SCORE Chapters, either free
or for a reasonable fee. Location and contact information for the centers can
be found on SBA's Web site.
Small businesses should ask for
references and confer with trusted colleagues and institutions, such as the
Better Business Bureau, when selecting service providers.
Small businesses should clearly establish
and document: 1) What they are being
charged; 2) When they will be charged; 3) What they must do; and 4) What
services they will receive.
The
administration's inspector general will investigate and respond to all
complaints. Anyone with knowledge of a
misrepresentation regarding SBA Business Loan Programs, or any other SBA
program, is encouraged to call 415-744-6820. You also may submit a written fraud report and mail it to SBA, 455 Market St., Suite 600, San Francisco, CA
94105, ATTN: Lender Relations.
