SBA Investigates Overcharging for Help With Riot Aid Loans

The Small Business Administration is investigating reports that some riot victims are being overcharged for help in applying for disaster loans.

Officials say that at least one private accounting firm has been found to be charging fees of as much as $5,000 to prepare SBA loan applications, which can involve lengthy and complicated forms.

Several agencies and volunteers are providing free assistance but they have a growing backlog that has led many applicants to seek help from private consultants. SBA officials say applicants should be wary of any firm or individual charging more than $1,000 to prepare a loan application package.

“SBA policy is definitely being violated,” regional administrator Oscar Wright said. “It’s a developing trend we’ve seen in the last few weeks, not at an alarming rate but substantial enough that we want to halt it.”

Wright warned that accountants, attorneys or other advisers found to be overcharging their clients could be required to reimburse fees or be suspended from doing business with the SBA. Such action could result in the rejection of loan applications prepared by those individuals.

Those interested in applying for disaster loans can call (800) 525-0321 for information about groups that provide free assistance. The deadline to apply for loans to pay for property damage is Aug. 15. Loans compensating for other economic losses will be available through February.