Paycheck Protection Program lender pays the price for lying about loan processing times

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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