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How to Successfully
Apply for Business Grants
Avoid Business Grant Scams
The very idea of all of the ads that
tell you that they have free grants to
offer sounds too good to be true, and
the fact is that in some ways it is. The
ads claim that you will qualify to
receive a grant for your business. They
say your application is guaranteed to be
accepted, and you never have to repay
the money.
There is of course a catch that they
don’t mention. The Federal Trade
Commission (FTC), the nation's consumer
protection agency, warns you that money
for nothing business grant offers often are a
scam: the grant isn't free, it isn't
guaranteed, and often, it isn't even
available to you.
Some people actually market free
business grants
in classified ads, which begin by
inviting consumers to call a toll-free
number. If you call, a representative of
the company will ask you some basic
questions to determine if you qualify to
receive a grant, and some of these
questions include:
1. What's your address?
2. How long have you lived at this
address?
3. Do you have a bank account?
4. Do you have at least $200 in your
account at this time?
Next thing you know you are being asked
to hold on the line while your
eligibility is determined. After she
congratulates you on your eligibility,
she will ask you to pay a one-time
processing fee that can range from
anywhere from $100 to $300.
If you question this fee, you will then
be reassured that you that the business grant is
guaranteed, and that if you're not
COMPLETELY satisfied with your grant,
you'll get a refund. However, she won't
offer to tell you all the conditions for
a refund.
The processing fee is said to cover
finding a business grant source and sending you
the appropriate application package in
the mail. However, you won't receive an
application or a source. What you will
get is a list of agencies and
foundations to which you must write and
request an application. This information
is available for free at any public
library or on the Internet.
Most sources of grant money don't give
business grants to individuals for personal need.
Grants usually are given to serve a
community good, such as bringing new
jobs to an area, training young people,
preserving a bit of history, funding
soup kitchens or art museums, or
researching medical issues.
If you ask an agency or foundation for
money for personal reasons, you probably
won't get it, even if you are
financially needy. You are also not
likely to get a refund from the grant
broker because the conditions for a
refund are nearly impossible to meet:
you usually have to apply and be denied
by each person on the list within 90
days.
If you're thinking about applying for a
business grant, you need to remember
that the applications are available to
you for free and that anyone who
guarantees you a grant is likely to be
interested in their own gain, and
definitely not yours. If you think you
may have been a victim of a grant scam,
file a complaint with the FTC.
The FTC works for the consumer to
prevent fraud, deceptive and unfair
business practices in the marketplace
and to provide you with information to
help you see, stop, and avoid them.
If you want to file a complaint or to
get free information on consumer issues,
visit
FTC.gov or call toll-free,
1-877-FTC-HELP (1-877-382-4357); TTY:
1-866-653-4261.
The FTC will participate against
Internet, telemarketing, identity theft,
and other fraud-related complaints into
Consumer Sentinel, a secure, online
database available to hundreds of civil
and criminal law enforcement agencies in
the U.S. and abroad.
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