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?
 |
A small business wants
to expand but is unable to borrow enough
money to do so. |
|
They hear about a grant
assistance company or are contacted directly
by one. |
|
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 |
|
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. |
|
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?
|
Get everything in
writing. |
|
Do not sign a contract
without reading it first. |
|
Check to see if the
company is licensed with the appropriate
local or state agency. |
|
Check the company out
with the Better Business Bureau. |
|
Google the company’s
name for complaints. |
|
Be cautious if you are
asked to provide more money for services you
have not yet received. |
|
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.
