Today's takeaway: If you didn't request an SBA loan, the government isn't emailing you to offer one.
The United States Federal Trade Commission (the "FTC") recently issued a warning to small businesses about (yep, yet another) scam targeting their owners' confidential information.
This time, scammers are taking advantage of mom & pop businesses who might need money due to coronavirus restrictions and the resulting economic downturn. Know anyone who might fit that description?
In case your Inbox is one of the lucky ones targeted, here are your red flags:
1) You get an e-mail claiming to be from the "Small Business Administration Office of Disaster Assistance," buuuuut .... you haven't applied for an SBA loan.
2) The e-mail offers you a loan of "up to $250,000" or some other big amount... or any amount, really.
3) The e-mail indicates that you're pre-approved or automatically eligible. This isn't really a thing with legit lenders you've never worked with before. Also, the SBA doesn't have to "sell" their loans by using this enticing language. And "automatically eligible" could mean anything. "Eligible," "pre-approved," and "approved" are terms of art meaning wildly different things in the lending world, but they all sound pretty good when you see it in writing next to a big-dollar-amount.
4) Here's the dangerous part, if you respond or click on a link: You'll be asked for your date of birth and Social Security Number. This is how identity theft happens.
5) You might also be sent to a phony website to enter your personal information. Most relevant to this post are websites posing as the SBA EIDL (Economic Injury Disaster Loan) program, but the same red flags apply to unsolicited e-mails from the IRS, Social Security Administration, and other government agencies.
If you're looking for a legit government loan, please (PLEASE PLEASE PLEASE) type in a legit government website into your web browser yourself. Government websites usually have the agency name or acronym ending in ".gov." They'll be secured (look for the little padlock in the left-hand side of your browser bar). Lots of phony websites are pretty well-made, and even clicking on links in internet search results can lead you to a phony site. Scammers have finally realized that their bad grammar and typos are raising red flags with their scamees (probably not a word, but it works here), and they've apparently been employing editors or taking some basic English courses to up their game, so you can't rely on decent grammar indicating a trustworthy source.
For SBA loans, we recommend starting at www.sba.gov (not linked because we want you to practice typing this in yourself, and it's pretty easy) and looking for your preferred loan program from there.
6) Still convinced that e-mail is legit? If you've already applied through a legitimate source, maybe it is.
Here's the number for the SBA Office of Disaster Assistance, where you can talk to a human about an EIDL Loan or start the process with a reliable source: (800) 659-2955.
If you're looking for another type of SBA loan (EIDL is working capital only, but there are lots of different loan programs), you can start here: (800) 827-5722.
Bonus points if you typed in the SBA's website and went to their Contact Us page to confirm these phone numbers before calling them. That's a pretty good habit.
As always, we'd love to be considered as your business's outside legal counsel.
Email firstname.lastname@example.org to schedule a get-to-know-you appointment if you'd like to get started.