N.Y. Targets Loan Website So Confusing Even Mnuchin Got It Wrong
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A small Texas company that profits from loan applications is using a web address so similar to the Trump administration’s portal for small businesses that even Treasury Secretary Steven Mnuchin pitched the wrong one when outlining a pandemic-aid program, New York officials say.
The website used by Houston-based Small Business Advice is deceptively close to that of the U.S. Small Business Administration, creating the “misleading impression” that it’s affiliated with the agency, New York Attorney General Letitia James said in an April 14 cease-and-desist letter to the company.
Mnuchin referred to the company’s website rather than the government link at the Coronavirus Task Force briefing on April 2, when he told millions of viewers how to seek guidance on tapping $349 billion in forgivable loans provided under the CARE Act to pay employees. Congress passed the law last month to help revive the shuttered economy.
“I encourage all companies, go to SBA.com, go to Treasury.gov,” Mnuchin said, according to a transcript on the White House website that has since been corrected. “You can see the information you need immediately.”
For the record, the government address is SBA.gov — not SBA.com.
While Small Business Advice has posted warnings on its website that say it has no link to the government, Mnuchin’s error illustrated how easily the company could benefit from loan seekers intending to tap into the government website.
The company says its service is free for applicants, but it gets paid when qualifying loans are matched to participating lenders through a third party called Lendio.
Applicants don’t need to use Small Business Advice or any other third party to get government money, which is part of the CARE Act’s Paycheck Protection Program and is due to run out at any time.
“The SBA.com home page only contributes to these misleading impressions by prominently advertising links to find ‘Covid-19 Relief’ and stating that ‘Your Paycheck Protection Program Loan starts here’ despite the fact that SBA.com is not a lender or certified participant,” James said in a statement Thursday.
Neither Small Business Advice nor Lendio immediately returned messages seeking comment.
Republicans and Democrats are in discussions to extend the small business loans. If that happens, the risk for confusion will continue.
James advised small businesses to avoid deception and watch out for tricks, such as “unscrupulous agents or lenders” that may encourage borrowers to put false information on applications to get the biggest loan possible and maximize lender fees. The attorney general also suggested applicants check the Small Business Administration’s website for participating lenders.
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