Delays in Processing Loans Needed by Small Businesses — The FTC

Summary

This FTC post says the FTC alleges that Biz2Credit Inc. accepted more emergency Paycheck Protection Program loan applications than it could process within the promised timeframe of 10-14 business days. It says the company's average processing time was roughly double what it claimed, forcing tens of thousands of small businesses to wait, and that the company sometimes prevented small businesses from withdrawing their applications so they could apply to other lenders. To settle the case, Biz2Credit will pay $33 million, and change the way it operates. It is barred from misrepresenting application processing times, applicants' odds of approval and the status of applications, and must let applicants promptly withdraw. Reader comments dated March 18 to April 02, 2024 follow the post.

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Full text

Delays in processing loans needed by small businesses in an emergency — like the pandemic — can leave them struggling to stay open. And deceiving consumers about these delays violates the law. The FTC says that's what happened when small businesses applied for emergency Paycheck Protection Program loans from Biz2Credit Inc.

The FTC says that when Biz2Credit Inc. marketed and offered emergency PPP loans, the company accepted more applications than it could process within the promised timeframe of 10-14 business days. Riddled with delays, Biz2Credit’s average processing time was roughly double what it claimed, forcing tens of thousands of small businesses to wait and wait. Another problem? The FTC says the company sometimes prevented small businesses from withdrawing their PPP loan applications so they could apply to other lenders. In the end, some Biz2Credit applicants never received funding they desperately needed.

To settle the case, Biz2Credit will pay $33 million and change the way it operates. For example, it is barred from misrepresenting important details like application processing times, applicants’ odds or likelihood of being approved, and the current status of applications. And, Biz2Credit must let applicants promptly withdraw their applications.

Stay tuned for more information about potential payments from this settlement. Bookmark the case page and check back regularly for more information as it becomes available.

Before you start shopping for small business financing, check out funding options for your business at the Small Business Administration’s website. And learn to avoid small business scams at Protecting Small Businesses.

If you’ve spotted or experienced a deceptive lender, tell the FTC at ReportFraud.ftc.gov. We use and share reports with law enforcement partners to help with investigations.

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Topics

Loans and Mortgages

Scams

Scams Against Small Businesses

Olive D

March 18, 2024

Thank you for this good news, FTC! The damage done by these delays, and then not being able to withdraw an application and apply somewhere else ... it's good to hear that Biz2Credit will be held accountable, and with hope be an example to others.

Cecelia white

March 18, 2024

Not me

Ray miller

March 21, 2024

The system was mess up the way it was done i worked all my life paid taxes i couldn't even get a loan due to all this lieing scammers took the funds now iam getting ready to close my business due to incorrect information

Lesia Porter

April 02, 2024

In reply to The system was mess up the… by Ray miller

Mr. Miller I was denied a loan because due to all of the scamming that took place my application didn't get processed in time. They shut the door on me before my information was processed. TERRIBLE!

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