Small Business Scams & 4 More Small Business News Stories You Need To Know
Welcome to another week of Merchant Maverick’s essential news roundup for small business owners.
The presidential nomination dominated headlines this week, but the world of small business still had a few news tidbits to discuss, including COVID-related scammers and the relaunch of the Paycheck Protection Program. Read on through for this week’s top five must-know stories for small business owners:
Table of Contents
- FTC Warns Small Businesses To Be Wary Of COVID Scammers
- PPP Relaunches, Sends Aid To 60,000 Businesses
- Stimulus Checks Give Restaurants Sales Bump
- Over 80% Of Small Businesses Have Adopted Digital Technologies
- Report Finds IRS May Have Erroneously Paid Businesses Millions
- The Latest From Merchant Maverick
- Something Good…
FTC Warns Small Businesses To Be Wary Of COVID Scammers
The FTC warned small businesses last week of a COVID-related scam. This scam arrives via email and claims to come from the “Small Business Administration Office of Disaster Assistance.” It additionally tells the recipient that they have been awarded a loan of up to $250,000 and requests personal information (like birth data or social security number).
To help business owners spot the scam, the FTC shared three “clues”:
Clue #1. You got an email or phone call out of the blue that claims to be from the IRS, the Social Security Administration, or – in this case – the Small Business Administration. The FTC has warned about government imposter scams like this.
Clue #2. You were told that you’re automatically eligible for a big loan. Real lenders never do this.
Clue #3. You’re asked to hand over your date of birth and Social Security number. This is a tip-off that the sender is trying to steal your personal information.
PPP Relaunches, Sends Aid To 60,000 Businesses
About 60,000 borrowers were approved for over $5 billion Paycheck Protection Program loans this past week, according the Wall Street Journal. The average loan size was below $20,000 for first-time borrowers and $75,000 for second-timers — both numbers are well under the $101,000 average from the PPP’s first round last spring and summer.
Bloomberg additionally reported that lenders hustled to get loans to minority-owned businesses. The publication specifically noted how several community lenders were seeing in an increased interest with the relaunched PPP program compared to last year.
Further reading: Round 2 PPP Loans Explained: Rules, Requirements, & Where To Apply, Merchant Maverick
Stimulus Checks Give Restaurants Sales Bump
Data from chain restaurants indicates that the recent stimulus checks ($600 per adult and $600 per child) are providing quick sales boosts. Such a boost is crucial to the restaurant industry, which has struggled mightily in the past year.
What’s not clear is how long this financial boost will last — any sales improvements made with the previous round of stimulus checks faded quickly.
Over 80% Of Small Businesses Have Adopted Digital Technologies
A study by Visa has found that 82% of small businesses have upgraded to new forms of digital technologies during the pandemic. Digital technologies include products such as accepting contactless or mobile payments, or using “buy now, pay later” services.
In our COVID world, embracing digital products has been crucial for small businesses to survive. Visa’s study further found that over half of customers have used contactless payments “whenever possible” during the previous three months.
Further reading: 6 Need-To-Know Buy Now, Pay Later Statistics For Small Businesses, Merchant Maverick
Report Finds IRS May Have Erroneously Paid Businesses Millions
$57 million in “pass-through” tax deductions for almost 13,000 taxpayers may have been processed in error last year by the IRS, according to a recently released IRS watchdog report. The potential mistake came via legislation in the Tax Cuts and Jobs Act signed into law by former President Trump in 2017.
Per CNBC, the deduction allows pass-through entities (such as sole proprietors or partnerships) to deduct up to 20% of their business income from their taxes. The report failed to say why almost 13,000 tax filings were flagged as potentially erroneous.
Further reading: The Complete Guide To Small Business Taxes, Merchant Maverick
The Latest From Merchant Maverick
Economic Injury Disaster Loan grants have returned as a financial tool for struggling businesses in 2021 — but only businesses in low-income areas are eligible. If you are unsure if your business is located in such a community, check out our article on the topic:
In Seattle, home bakers have made and donated over 1,300 loaves of bread to a local food bank. The project, dubbed “Community Loaves”, has been spurred on by over 500 home bakers.
“When I think of my childhood, my baba, my grandma used to make the best homemade bread,” Matthew Campbell, the associate director of food programs at the food bank, told NBC’s Today show. “That reminds me of this. You can see smiles through masks. You still can. You can see the eyes go up. (With) 600, 700 loaves of bread now, that’s 600, 700 smiles.”