N.Y. targets loan website that even confused Mnuchin
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 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.
Borrowers must go through third-party lenders to get the government money, which is part of the CARE Act's Paycheck Protection Program. But using SBA.com to connect to a lender isn't a requirement for getting PPP loans.
"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.
Small Business Advice didn't immediately return messages seeking comment.
Lendio's founder and chief executive, Brock Blake, said his company has helped more than 5,700 small businesses directed to Lendio through SBA.com get PPP loans approved, averaging about $32,000.
"They're really helping the smallest business owners," Blake said, adding that he's been in partnership with SBA.com for about a year and a half.
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 "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.