President Eisenhower helped to create the United States Small Business Administration in the 1950s. Its mission is to maintain and strengthen the economy by helping small businesses establish themselves and help with economic recovery after disasters.
One of the ways the SBA accomplishes its mission is to offer loans to small business owners and entrepreneurs during crisis situations.
These lending products. Come through credit unions, banks, and other partners who work with the agency.
The loans are an attractive option for lenders because they come with a 90% guarantee since the Recovery and Small Business Jobs Acts.
SBA officials are also responsible for delivering prime federal contracts to small businesses, including efforts to work with veterans, women, and minorities.
Anyone who receives a loan from the SBA or applies for financing would receive a notation of this activity in their credit report.
US SM BUS ADMIN ODA Hard Inquiry on Credit Report
The US SM BUS ADMIN ODA appears when individuals or small businesses apply for a loan or lending product through the Small Business Administration. The most common application is from an economic injury disaster loan, but other products are available through the SBA. Anyone not initiating a loan should investigate the matter.
The Small Business Administration is a cabinet-level federal agency in the United States. It is the only one of its type that offers capital generation, contracting expertise, and counseling to small business owners across the United States.
Its goal is to increase the economy and promote entrepreneurs, sole proprietors, partnerships, LLCs, and other business structures that fall within the small business category.
Business Insider put together some facts about why having a federal-level support system at such a high level is important for American business owners.
- Small businesses outnumber large corporations in the United States by a ratio of 1,162 to 1. That means there are approximately 28 million small businesses operating today, many of which have ten or fewer employees.
- 70% of today’s small businesses are owned and operated by one person.
- Over half (57%) of the private workforce in the United States is employed by a small business, and these companies are responsible for 44% of the country’s payroll each year.
- It only takes six days to start a business in the United States, and it is even faster for sole proprietors who don’t have licensing requirements to manage.
- The average cost to start a business in the United States is $325. Only the United Kingdom ($246) and Ireland ($127) are cheaper.
The SBA was created in 1953. One of its essential functions is to offer businesses in disaster zones some financial relief by providing no- or low-interest loans to help restore functionality. This lending occurs through the Office of Disaster Assistance, or the “ODA.”
If you have a US SM BUS ADMIN ODA entry on your credit report, it will appear in one of two ways. You could have it listed as a hard inquiry or as a hard inquiry with a loan attached to it.
Business owners that apply for federal assistance through the ODA will see the first option appear almost immediately after the application gets processed. The second occurs between 30 to 90 days after the loan is approved for most people.
If you didn’t apply for disaster relief or an ODA loan, you would want to contact the SBA to tell them that fact, then start the process of challenging the loan and filing identity theft paperwork.
How to Contact the Small Business Administration
For all general concerns, you can contact the Small Business Administration by using the agency’s toll-free customer number. It is (800) 827-5722.
If you have the US SM BUS ADMIN ODA entry on your credit report, it could be due to someone applying for a COVID-19 Economic Injury Disaster Loan, or EIDL. You can dial (833) 853-5638 to talk with a representative about your concerns.
For those who receive the ODA designation and live in a disaster zone, you can call (800) 659-2955 to discuss your circumstances.
You can email disastercustomerservice@sba.gov if you prefer a written exchange for your records or receive EIDL advice by sending a note to targetadvance@sba.gov.
The customer service center for the SBA is open from 8 AM to 8 PM on weekdays, Eastern time.
What If I Didn’t Take Out or Apply for a Small Business Loan?
If you have checked your credit history, found the US SM BUS ADMIN ODA entry, and know for certain that you didn’t apply for a loan, it likely means you’ve been the victim of identity theft. Before proceeding to the steps below, you’ll want to verify if someone in your company applied for funding or if the loan’s proceeds are in your account.
If you have received funds from the loan that you didn’t request, you can contact the SBA toll-free customer service line to discuss how to return that money.
When someone takes a loan out in your name, you must take action right away to prevent additional damage to your credit score. Here are the steps you’ll want to follow if identity theft happens to you.
1. File a Police Report
The first step is to speak with your local police department about filing a report. Some agencies allow you to complete the paperwork online, but you might need to go to their non-emergency location to file the documents.
If you live in a small town, an officer might wish to interview you about the circumstances surrounding your identity theft with the US SM BUS ADMIN ODA entry.
Most lenders and credit reporting agencies require a police report to be submitted that documents the identity theft. Without this initial step, the fraudulent SBA loan will stay on your credit report.
2. Contact the Lender
When you see the US SM BUS ADMIN ODA entry, you might have a bank, credit union, or another lender listed on the report for the loan.
You will need to contact the SBA toll-free customer service line to tell them about the identity theft, and you’ll likely be asked to provide the police report number from the first step.
If the contact information for the bank, credit union, or other lender appears on your credit report, it helps to notify them of the identity theft incident after contacting the SBA.
Although refunds are possible with many ODA loans, the failure to pay premiums can have a devasting impact on your credit score. Missing one payment can cause it to drop by 60 to 100 points immediately.
Each lender has its own process for investigating fraudulent loans. It may take some time before you receive any news about the situation. In many cases, you don’t receive an update at all.
3. Dispute the Error
After taking the first two steps in this situation with a US SM BUS ADMIN ODA entry on your credit report, it is possible to dispute the information.
You must dispute the error with all three credit reporting agencies. Those are Experian, Equifax, and TransUnion.
Each one has a specific process to follow when disputing information from identity theft incidents.
Contact them separately, provide evidence, and include your police report. If the lender acknowledged that you didn’t take out the ODA loan in writing, offer this info during this step.
Once the credit reporting bureaus have your dispute information, they will also conduct an investigation.
This process can take some time, but your credit report should reflect that you’re disputing the fraudulent loan.
You will receive a report of the investigation from each reporting bureau once it is completed that includes the actions taken to correct the situation.
Although it can take months to have the items removed from the credit report, your score will eventually get restored to its previous level.
4. Use Freezes and Fraud Alerts
If someone was able to take out an SBA loan in your name, it means they can open other accounts.
Once you’ve confirmed a fraudulent US SM BUS ADMIN ODA entry, contact each credit reporting bureau to have a fraud alert or credit freeze placed on your account.
This step can be completed online at the websites of Experian, Equifax, and TransUnion.
You only need to take this step with one of the reporting bureaus. Once you request an alert or a freeze, the information is passed along to the other two.
Potential lenders or creditors receive this notification when they attempt to run your credit, prompting them to take more steps to verify the applicant’s identity.
If you request a freeze, a creditor or lender cannot view your credit report or issue new loans or accounts until it is removed.
5. Start Checking Your Credit Regularly
The only way to tell if a fraudulent entry appears on your credit report is if you review this information regularly or receive alerts of suspicious activity.
You can request a free credit report from Experian, Equifax, and TransUnion each year by visiting annualcreditreport.com.
If you stagger the requests across four months, you’ll have a no-cost way to keep an eye on your credit score to see if someone is trying to take advantage of your financial profile.
How to Get Your COVID-19 Economic Disaster Loan Forgiven
The Consolidated Appropriations Act of 2021 provides money for EIDL advances and grant funding that targets businesses that had to close because of the pandemic.
If you received grant money as a business owner, there is no expectation of returning it. This activity does not appear on your credit report because there isn’t a debt obligation to manage.
When you see a US SM BUS ADMIN ODA entry, that means a lender is involved with your business.
Most people would have this designation appear through the Paycheck Protection Program, or PPP, which closed in 2020, but reopened with the Consolidated Appropriations Act.
Business owners could take a first and a second draw on a PPP loan, so it is possible for two fraudulent entries to be on your credit record.
If you took out an ODA loan, you might be eligible for forgiveness. You had to use the money during the covered period to maintain employment levels and compensation, the proceeds went to qualified expenses, and at least 60% of the money went to payroll.
The Consolidated Appropriations Act added several forgivable uses of the proceeds from these loans, which is why some business owners saw more fraudulent entries.
Forgivable uses include any or all of the following.
- Rent or mortgage interest and utility expenses.
- Commissions, wages, tips, and salaries up to $100,000 per employee.
- Local and state taxes on compensation.
- Operations expenses, including business software, payroll processing, billing functions, and human resources activities.
- Property damage not covered by insurance due to looting or vandalism in 2020.
- Worker protection expenses.
- Group insurance costs, including vision, disability, dental, and group life.
You must apply to your lender for loan forgiveness at the end of the disbursement period for your loan.
It is possible that some, or all, of the amount may not be forgiven. If you have any questions about this process as part of your credit inquiry, it will help to speak with an SBA official by calling the agency’s toll-free line.
What Can I Do About the US SM BUS ADMIN ODA Entry?
Anyone with a fraudulent entry on a credit report must dispute it to prevent the listing from causing further damage to their profile. When a new account gets established, someone else is in control of those funds. They don’t have to return the money because lenders would see it as the victim’s responsibility without notification.
I had my identity stolen after The Home Depot data breach in 2014. At first, the only thing I had to deal with was some prepaid cards coming in my name and hard inquiries from people trying to open new credit cards unsuccessfully.
I filed a police report for each incident, notified the credit bureau, and had a credit freeze put on my account.
We bought a house in 2020. After leaving the credit freeze in place for six years, I had to release it to apply for a mortgage right at the time the COVID-19 pandemic shut down everything.
It only took four days for someone to take out a PPP loan and have the US SM BUS ADMIN ODA entry appear.
Thankfully, I have alerts set up so that any suspicious activity on my credit sends a text. Once I got this information, I called the SBA and told them I didn’t need the loan and that someone had stolen my identity.
After filing another police report and disputing the information, the entry was removed in two weeks. That allowed me to complete the mortgage application process.
Being proactive about your credit makes it easier to stop fraudulent activity. Request those free credit reports each year to ensure you have a closer eye on everything.
