4/6/2010 - U.S. Small Business Administration warns of scams


Published April 05, 2010 10:51 pm

U.S. Small Business Administration warns of scams

PLATTSBURGH — The U.S. Small Business Administration is warning small-business owners of scams involving firms that offer assistance to apply for loans through SBA programs.

The administration and the Small Business Administration Office of the Inspector General have received complaints of abusive marketing, scams and exorbitant fees charged by firms offering help to obtain a loan, grant or other funds from the administration.

In a press release, the Small Business Administration said those complaints include companies that charge high fees to apply for SBA funding. Some firms went so far as to guarantee funding would be received if the fee was paid. The SBA said it does not endorse or give preference to a specific company or its clients.

Another complaint is that companies were charged for services never requested after a company employee provided bank account and routing information to a caller who claimed to offer assistance. The SBA said small businesses should never provide Social Security numbers, bank account information or credit-card numbers to anyone, and certainly not over the phone.

Also, some firms allege a small business would get a forfeiture letter that would make it ineligible for SBA funding if it did not use the firm's services.

Before they decide to use a third party to apply for SBA funding, a small business should know free assistance is available by visiting or calling one of the SBA's 68 District Offices or from its Web site, www.sba.gov. Assistance is also available from Small Business Development Centers, Women's Business Centers, Veterans Business Outreach Centers and SCORE chapters, either free or for a small fee. Contact information on those offices can be found on the SBA Web site.

Small business personnel should ask for references and confer with trusted colleagues or institutions, such as the Better Business Bureau, before they select a service provider. They should clearly establish and document what they will be charged, when they will be charged, what they must do and what services they will receive.

The SBA's Office of the Inspector General will investigate and respond to all complaints.

Anyone with information of misrepresentation or other fraud is urged to contact that office's hot line at (800) 767-0385 or sending an online report at www.sba.gov/ig and using the link "Report Fraud Waste or Abuse."

Questions about SBA loans or programs can contact their local SBA District Office, the SBA Answer Desk at (800) 827-5722 or e-mail at answerdesk@sba.gov.




The week of Sept 17 --25.

Governor Cuomo Announces Groundbreaking of Frontier Town Campground and Paradox Brewery

$25 Million Public/Private Investments Committed To-Date Will Establish 'Gateway to the Adirondacks' Tourism Hub

see all

Like Us on Facebook and follow us on Twitter!


Visit Us On Facebook!           


NYS SBDC Research Network Blog


For Email Marketing you can trust





The SUNY Canton Small Business Development Center at Clinton Community College is funded in part through a Cooperative Agreement with the US Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA.