NEW YORK (WKBW) — New York Attorney General Letitia James announced Thursday actions have been taken to protect and support small businesses impacted by COVID-19.
The AG issued a bulletin summarizing the federal government's Paycheck Protection Program, which small businesses are eligible for loans through, and highlighted some risks to avoid fraud.
Thursday the Small Business Administration announced it reached the lending limit for the program, putting it on hold until Congress approves a Trump administration request for another $250 billion for the program.
“Hardworking families and small businesses across the country are struggling more than ever because of this pandemic,” said Attorney General James. “These businesses are the backbone of our economy and our households and we must ensure they have the resources they need to stay afloat and support their employees. 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.”
The guidance issued by the AG includes the following:
- Deal only with known, trusted lenders that are eligible to issue PPP loans. Visit the Small Businesses Administration’s website to find a full list of eligible vendors.
- Make sure that the information in your loan application is correct. 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. Incorrect information in an application can result in criminal liability for the borrower.
- Borrowers should not pay fees to get a PPP loan. Lenders are paid fees for PPP loans only by the SBA, not by borrowers. If the borrower is working with an agent, the agent’s fees are paid by the lender.
- Borrowers should not pay more than 1% annual interest for a PPP loan.
Small businesses can apply for the PPP at an SBA.gov website which can be viewed here.
The AG says a cease and desist order has been issued to “SBA.com” for deceptive marketing and business practices related to the issuance of PPP loans.
"The 'SBA.com' website has the potential to mislead small businesses that are looking to obtain loans through the PPP," the AG's office says. "The website creates the misleading impression that 'SBA.com' is the same as or is affiliated with the U.S. Small Business Administration (SBA) and its website 'SBA.gov.'"
If a small business borrower believes it has been defrauded, it may file a complaint with the Attorney General’s Office of Consumer Frauds and Protection or call 1-800-771-7755.