Government Grant Scams
by BobK, Community Administrator
- Created: March 20, 2009, 12:40 pm
If you have looked for a government grant for your business, it is
very likely you have encountered several websites promising access to
'free government grants that you don’t have to pay back' and
testimonials from apparent business owners who received tens of
thousands of dollars to start a business.
Are these legit? No. They are scams. Here’s how they work:
company guarantees that you will get a small business grant or your money back. For a fee of $30 - $50 you get a
subscription to a grants database, or a grant package with information
on how to write a grant proposal and a list of government agencies that
provide business grants.
You pay the fee and you may (or may not) get
information. However, the government agencies listed do not actually
provide grants to help start or expand a business. In fact, you'll
probably find it difficult getting your money back, and you could lose
more than your initial investment if you've signed up for a
subscription with a credit or debit card.
Economic Stimulus Grants
recent Economic Stimulus package signed by President Obama has created
a whole new class of scam sites offering information on stimulus grants
for individuals and small businesses. These sites are particularly
preying on small business owners who are struggling to stay in business
and in search for money to keep them afloat.
As tempting as it
may be to explore these programs offering free stimulus money, you will
be wasting your money by signing up with one of these websites. There
is no money in the stimulus package for sending individual checks to
small business owners.
And contrary to what you may read, the government does
not secretly give away excess budget money to individuals in the form
of grants. There is no secret door with free money behind it.
Scam Sites about Scam Sites
the scammers have figured out people are on to them. They are now
setting up websites that discuss government grant scam sites, and
promote a list of websites that claim to provide legitimate grant
information. Many of these sites are just fronts for scam sites.
Grant Information is Free
agencies publish grant information on the web, and make it accessible
for free. You do not need to pay anyone to access grant
information. Grant information is
easily accessible by visiting agency websites, searching on your favorite
web search engine, or using one of these databases:
- Business.gov's Loans and Grants Search Engine
provides legitimate small
business loans and grant programs (when available) for which
you might qualify. Currently, this tool contains mostly loan programs,
but we are continuously updating it, and will add relevant grant
programs as we identify them.
is database of federal grants, most of which are available to
non-profits, cooperatives, other government agencies, and academic
institutions. Grants.gov is the one-stop resource for finding grants
offered by federal
agencies. Some grant programs do allow eligible for-profit entities to
compete for grant money, however, these are highly specialized
programs, such as specialty crop research. However, you won't
find small business grants for starting a business, paying off debt or
otherwise help for running your business.
The Bottom Line
The bottom line is that
Federal and state agencies do not provide small business grants for
starting a business, paying off debt, or to cover operating expenses.
However, government agencies do provide guarantees on low-interest loans
for these purposes. You can use the Loans and Grants Search Engine to find programs for which you may be eligible.
For more information on government grants, visit the following resources:
- 'Free Government Grants' : Don't Take Them For Grant-ed (Federal Trade Commission)
- Government Grant Telemarketing Scams (Federal Trade Commission)
- Grant Companies Exploit Confusion over Stimulus Bill to Rip Off Consumers (Better Business Bureau)
- Government Grants Guide (Business.gov)
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Loans, grants, taxes, and financial tips for your business.