Scams and Fraud Alerts
The Office of Inspector General recognizes that we are facing unprecedented times and is alerting the public about potential fraud schemes related to economic stimulus programs offered by the U.S. Small Business Administration in response to the Novel Coronavirus Pandemic (COVID-19). The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the largest financial assistance bill to date, includes provisions to help small businesses. Fraudsters have already begun targeting small business owners during these economically difficult times. Be on the lookout for grant fraud, loan fraud, and phishing. Source.
SBA Alert to Loan Applicants: Beware of Email Phishing Scams
The SBA is sending a cyber warning alert to loan applicants seeking federal aid in response to the Coronavirus (COVID-19) pandemic. Email phishing campaigns where malicious actors are impersonating the SBA and its Office of Disaster Assistance to collect personally identifiable information (PII) for fraudulent purposes have surfaced.
The SBA is particularly concerned about scam emails targeting applicants of the SBA’s Economic Injury Disaster Loan Program asking them to verify their accounts using a third-party online platform to collect personally identifiable information.
It should be noted that any email communication from the SBA will come from email accounts ending in sba.gov, and nothing more. Loan applicants are being advised to look out for email scams and phishing attacks using the SBA logo. These may be attempts to obtain PII, access personal banking accounts, or install ransomware or malware.
Applicants are also advised to help protect their identity and privacy by never providing their full name, date of birth, social security number, address, phone numbers, email addresses, case numbers, or any other PII in public-facing comments or responses to third-party emails.
The SBA will not use a third-party platform to:
- Actively seek PII
- Search a third-party platform for or by PII, or
- “Follow” public users proactively without a waiver.
Borrowers who are in the process of applying for an SBA loan and receive email correspondence asking for PII are cautioned to ensure that any application numbers referenced in the email are consistent with their actual application number. Loan applicants and borrowers are also advised not to click on any links or open any attachments, which are often used in phishing email scams.
Resources available in response to the impact of COVID-19
Paycheck Protection Program
Although funds remain in the Paycheck Protection Program, as of August 8, 2020, applications are suspended.
The Paycheck Protection Program (PPP) prioritizes millions of Americans employed by small businesses by authorizing over $600 billion toward job retention and certain other expenses. Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards. Loans are made through participating banks and other financial institutions and potential borrowers apply there, rather than directly to the SBA.
- Eligible recipients may qualify for a loan up to $10 million determined by eight weeks of prior average payroll plus an additional 25% of that amount.
- Loan payments will be deferred for twelve months.
- If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover payroll and certain other expenses following loan origination.
SBA Economic Injury Disaster Loans
The SBA’s Economic Injury Disaster Loan program provides low-interest loans to small businesses and private non-profits affected by the COVID-19 pandemic. These working capital loans can be used to meet needs including payroll, accounts payable, and fixed debt payments until the situation improves. They have repayment options of up to 30 years. Interest rates are 3.75% for small businesses and 2.75% for private non-profits. Loans will have a deferred payment of one year from the date of note.
LISC-State Farm $10 million Low Cost Loan Fund
LISC and State Farm have partnered to create a $10M low cost loan fund to serve Illinois small businesses in need of working capital, restructuring of existing business debt, real estate acquisition, etc. Small Business Relief Grants are part of LISC’s Rapid Relief & Recovery Fund programs to help business with immediate financial impact due to the pandemic.
Applicants may apply for one business only and must be 18 years of age to apply. Each grant is limited to one grant per individual and business tax ID.
Awards will be made to qualified businesses, and eligibility is based on accurate and complete submission. Priority will be given to minority-, women-, and veteran-owned businesses.
All awardees will have to certify that they are promoting the best interests of the community and are negatively impacted by the Covid-19 crisis.
Non-profit organizations are ineligible for this funding.
You can start your application by completing the questionnaire here.
Downstate Small Business Stabilization Program
To support small businesses in downstate and rural counties across Illinois, DCEO is repurposing $20 million in CDBG funds to stand up the Downstate Small Business Stabilization Program. This Fund will offer small businesses of up to 50 employees the opportunity to partner with their local governments to obtain grants of up to $25,000 in working capital. These grants will be offered on a rolling basis.
Who is eligible?
Local governments can apply on behalf of businesses with 50 employees or less. Only units of local government recognized by the Illinois Constitution and able to support economic development activities on a sufficient scale are eligible to apply for Economic Development grant funding. This includes cities, villages, and counties. Municipalities must not be a HUD direct Entitlement community or be located in an urban county that receives “entitlement” funds.
Communities receiving an annual allocation directly from HUD on an entitlement (formula) basis are not eligible to apply for the State’s CDBG funding. In 2019, Illinois had 33 metropolitan cities and eight urban counties named as Entitlements. They are:
- Cook County
- DuPage County
- Kane County
- Lake County
- Madison County
- McHenry County
- St. Clair County
- Will County
- Arlington Heights
- Des Plaines
- Hoffman Estates
- Mount Prospect
- Oak Lawn
- Oak Park
- Rock Island
What can grants be used for?
Grants can be used to support working capital.
How do businesses apply?
Businesses in the eligible areas should work with their local governments to submit applications. Application materials will be posted to the DCEO website on Friday, March 27, 2020.
How much money is available?
Grants of up to $25,000 per business will be available.
How soon will businesses receive funds?
DCEO’s goal is to execute grants within 30 days of application receipt, after which funds will be accessible.
Information on Local Business Operations and Services
A website has been created to help consumers find the status of their favorite local businesses and their services available. The website will serve as the one-stop source for business information in Sangamon County.
Access to Resources
If you or someone you know is in need of direct services, please contact the United Way 2-1-1 service. 2-1-1 is your one-stop connection to the local services you need including utility assistance, food, housing, child care, after school programs, elder care, crisis intervention, and much more. Simply dial 2-1-1 on your mobile or land line phone.
Providing Direct Support to our Community
The Community Foundation for the Land of Lincoln and United Way of Central Illinois have joined together to create the COVID-19 Response Fund to deploy resources to community-based organizations at the front lines of a coronavirus spread in Illinois’ greater capital region.
General Information from the State of Illinois
The State of Illinois has created a site dedicated to providing information on COVID-19 and how they continue to respond.
Unemployment benefits may be available to some individuals whose unemployment is attributable to COVID-19. IDES recently adopted emergency rules to try to make the unemployment insurance system as responsive to the current situation as possible.
Information from the City of Springfield
The City of Springfield has set up a website to offer continually updated information related to COVID-19.
Other Helpful Links
- Illinois Department of Commerce and Economic Opportunity
- State of Illinois Business Portal
- US Small Business Administration: Programs and services to help you start, grow and succeed in business.
- Government Loans: Provides information on government loan programs, including many for potential and current small business owners.
- Internal Revenue Service: Assistance in understanding your tax responsibilities.
- Sell to the State of Illinois: The state purchases more than $10 billion worth of products and services each year. Are you competing for this business?
- The Federal Government Grant Search Site: Find and apply for federal government grants.
- Business Plan Examples: The Carnegie Library in Pittsburgh has a wonderful page devoted to business plans. There are links to sample business plans for a wide variety of businesses.
- DCEO Environmental Assistance Program: Located in the nonregulatory agency, this program provides free confidential information and services to help small businesses understand their environmental obligations.
- Identity Theft Information
- National Restaurant Association
Funded in part through a cooperative agreement with the U.S. Small Business Administration, the Illinois Department of Commerce and Economic Opportunity and Lincoln Land Community College. The support given by the U.S. Small Business Administration through such funding does not constitute an expressed or implied endorsement of the co-sponsor(s)’ or participants’ opinions, products or services. Reasonable accommodations for persons with disabilities will be made if requested at least two weeks in advance.