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Lompoc business owner warns others after almost becoming victim to PPP loan scam

Kanye West, law firms, hedge funds all got PPP loans
Posted at 11:41 PM, May 05, 2021
and last updated 2021-05-06 02:41:21-04

A Lompoc business owner is warning other small businesses after nearly getting caught up in a Paycheck Protection Program or PPP loan scam.

Business has been booming the last year for Joseph Benton.

"Since the pandemic started I've been busier than ever," Benton said.

Benton hosts virtual trainings so he never had to close down.

"The kind of work that I do is in much greater demand so that's how this whole issue came up with the SBA contacting me," he said.

Benton says he was caught off guard last week when he received a call from the Small Business Administration with concerns about a PPP loan filed in his name.

"The first thing that I said was: 'No, no, no. I didn't apply for a loan' and they said: 'Well that's good because it wouldn't have gone through anyway because you have frozen your credit.'"

Dawn Golik, the Director of the Fresno District Office for the Small Business Administration, says the SBA will more likely contact you by email than over the phone.

"Any communication from SBA that's legitimate will come from an email address that ends in @sba.gov and businesses can certainly reach out to our office if they're concerned about the legitimacy of any communication they get," Golik said.

Benton says he was able to fix the issue with the SBA and now suggests other business owners consider freezing their credit as well.

"I can't imagine what it would be like to try to get that information erased from your credit report - especially if you had taken money out and then having to deal with a debt that was suddenly heaped up on me — that would be very difficult to deal with. I am so thankful that I froze my credit," Benton said.

Not everyone is as lucky that fraudulent activity gets picked up by the SBA before you notice it.

The SBA says they take fraud very seriously and people who suspect they may be victims, should reach out to the SBA office nearest them; for us on the Central Coast, the nearest office is the Fresno District Office.

On Wednesday the SBA announced it has run out of money for borrowers. This comes a few weeks before the planned May 31 deadline. The SBA says it will continue to fund outstanding approved PPP applications from other lenders, but it will only accept new applications from community financial institutions, which typically serve minority borrowers.