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.
