CORRECTED: Biz2Credit Settlement with Federal Trade Commission
March 25, 2024
Delaney Sexton
Contributing Editor
Biz2Credit Settlement with Federal Trade Commission
The FTC took action against Biz2Credit claiming that its average processing time estimate of 12-14 business days for PPP loans set out on its website were misleading, as in some cases customer processing times took longer.
Further, the complaint states that when applicants wanted to withdraw their loan applications, they ran into unexpected delays in withdrawing their application and applying to other PPP lenders.
Source:
FTC Press Release
Publisher Note:
This article has been corrected. Biz2Credit’s Biz2X logo was used in error next to the article and has been removed. The FTC settlement only involved PPP and did not involve Biz2X or Biz2Credit’s commercial funding or software business.
Biz2 Credit forwarded the following comment to us and is published in full.
When reached for comment about the settlement, the company said: “The FTC’s timing claims include applications declined by Biz2Credit, including potentially fraudulent or ineligible applications, and ignored the fact that Biz2Credit’s timing estimate was accurate as to bona fide customers, including withdrawn applications. We are disappointed that the FTC took the positions that it did. Legal compliance is central to our business and strong reputation, and during the PPP program we did as much as any lender to comply with the government’s guidance. Not only that, we answered the call of the Biden Administration to fund truly underserved small businesses, as 47% of the businesses we funded during PPP were minority-owned businesses and 32% were women-owned businesses. The typical business we funded had under 3 employees.”
The company continued: “Biz2Credit is proud of its record of helping small business owners, and of the steps it took to protect against PPP fraud and abuse of taxpayer funds. During PPP, we viewed it as our role to provide funding only to the eligible small business that applied to us, and the statements on our website about average processing time gave those legitimate applicants an accurate estimate of what they could expect. The FTC emphasized Biz2Credit’s high declined application rate, but this just highlight’s the company’s commitment to weeding out fraud as required by program rules. We only got paid on applications we funded.”
Biz2Credit also took issue with the customer complaints cited by the FTC, stating. “One customer was held up for a long time due to SBA hold codes we had no control of. Once that customer provided proper documentation, it was funded 5 business days later. We have no record whatsoever of the other alleged complaint referenced by the FTC.”
The company concluded, “the unfortunate reality is that FTC actions like this are very costly to litigate, both in terms of time and money. Our decision to settle rather than contest the FTC’s claims in court represents a pragmatic decision to put the matter behind us with no admission of wrongdoing. In short, Biz2Credit agreed to this settlement so it can continue to fully concentrate on the important work of financing small underserved businesses in these uncertain times.”