| Small Business
Grant Scams The very small business person is often the
least educated regarding how to apply for, submit or obtain a grant.
A grant is frequently the best type of financing since it is a gift
that doesn’t have to be repaid, as does a loan. It doesn’t take much
marketing to sell a very small business person on applying for a
guaranteed grant to help with a business expansion or upgrade.
Unfortunately, scam artists pray on these vulnerable small business
people by seeming to promise the guarantee of securing a large
grant.
How does it work?
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A small business wants to expand but is unable to borrow enough
money to do so. |
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They hear about
a grant assistance company or are contacted directly by one. |
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They pay an
up-front fee, usually several thousand dollars, to the grant
assistance company and are verbally promised a large-dollar
grant that doesn’t have to be repaid. |
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Shortly after
signing the grant assistance agreement, the business person is
advised that he’ll be much more successful in obtaining a grant
if he restructures his business from a for-profit entity to a
non-profit entity for an additional up-front fee, again usually
several thousand dollars. |
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The small
business person soon finds out that there is no guaranteed grant
coming his way. His paperwork has merely been prepared and
forwarded to various grant providers. |
How can you protect yourself?
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Get everything in writing. |
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Do not sign a contract without reading it first. |
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Check to see if the company is licensed with the appropriate
local or state agency. |
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Check the company out with the Better Business Bureau. |
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Google the company’s name for complaints. |
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Be cautious if you are asked to provide more money for services
you have not yet received. |
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Click here for more information on grant fraud. |
For more information on grants, visit
http://www.grants.gov/help/general_faqs.jsp#12.
Source: Nevada Consumer Affairs Division and
http://www.grants.gov.
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