An out-of-state company is “deceiving small businesses by purporting to provide federal loans” to help them survive the coronavirus pandemic, state Attorney General Letitia James said Thursday.
Small Business Advice, through its sba.com website, creates the “misleading impression” that it’s part of the U.S. Small Business Administration, which runs the popular Economic Injury Disaster Loan program and oversees the Paycheck Protection Program. The federal agency’s website is sba.gov.
James said she issued a cease and desist order to Small Business Advice. “It’s imperative that small businesses know about the financial aid that is available and aren’t duped in the process of applying for these lifelines,” she said.
Small Business Advice officials did not immediately respond to a message left on sba.com Thursday. The site lists a Delaware address while the company's social media accounts reference a Santa Monica, California, headquarters.
The small company states at the top of its site: “Sba.com is not associated with sba.gov and is a private business providing resources for small businesses.”
Small business owners are instructed to complete “a loan request form” that will be used by Lendio, a Utah company, to complete a PPP loan application and submit it to a bank.
Banks and other private lenders stopped processing PPP applications on Thursday after the $349 billion in federal loan guarantees was exhausted. Additional loans cannot be made until Congress authorizes a larger guarantee.
Small business owners aren’t the only ones confused about sba.com. Treasury Secretary Steven Mnuchin incorrectly directed PPP loan applicants to the site during an April 2 press conference. The White House later corrected the error.
James advised loan applicants to work only with government-certified lenders and to be truthful when filling out the necessary forms.
“Unscrupulous agents or lenders may encourage borrowers to put false information in their loan applications to get the biggest loan possible, which would maximize lender fees,” she said. “Incorrect information in an application can result in criminal liability for the borrower.”