Fraudsters May Leverage Their PPP Approvals to Get Business Loans and MCAs

| By:

merchant fraudA small business finance underwriter torn between approving or declining an applicant probably should not consider whether or not that business got PPP funding as evidence of the applicant’s legitimacy.

A new alert put forth by Experian claims that “greater than 75% of PPP loans originated by commercial fintech lenders were NOT run through a fraud screening and have a greater probability of containing bad actors.” Experian says that “lenders will need to be more vigilant as they assess these businesses for future offers of credit.”

Experian cites data from the FTC that shows fraud and identify theft have surged since the pandemic started, climbing to even higher levels in 2021 over 2020.

Fraudsters that successfully obtained PPP loans with altered documents, for fake businesses, or on behalf of real businesses using stolen identities, may now use those as leverage to obtain additional money, particularly through sources where the perceived consequences of being found out are low. Non-bank funders and fintech lenders are an attractive target.

Just because an applicant got a PPP loan, underwriters should not assume it has passed a fraud check.

Last modified: July 21, 2021
Sean Murray


Category: Fintech, PPP

Home Fintech, PPP › Fraudsters May Leverage Their PPP Approvals to Get Business Loans and MCAs


    ROK Financial

    The Smarter Merchant

    Velocity Capital Group


    National Funding

    Fenix Capital Funding

    Dedicated Financial GBC

    CFG Merchant Solutions


    Amerifi Capital

    IAC - In Advance Capital


    Paz Funding Source

    South End Capital

    Symplifi Capital

    Meridian Leads

    Forward Financing

    Wynwood Capital Group

    Pearl Capital

    Spartan Capital

    Flash Advance

    IOU Financial


    Merchant Financing Leads

    Bitty Advance

    Main Street Finance Group