Small business grants are great if you can get them, but there are some scams that you need to be aware of.

For example, one scam offers a great-sounding deal: Fork over a small “pre-funding fee” as a down payment, in order to get hundreds of thousands of dollars in Small Business Development Center grants to start an e-commerce business. The scammers used the SBDC’s letterhead to make the ruse appear legit, the Lubbock Avalanche-Journal reports.

So how can you tell if the small business grant offer you’re considering is real? Here are five red flags to watch out for:

Remember that if you receive an offer for a small business grant that sounds too good to be true, it probably is. Rarely will anyone give out free money without strings attached.

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Related Resources:

  • Finance and Small Business: Your Guide to Grants (FindLaw’s Free Enterprise)
  • Financing Small Businesses: Do’s and Don’ts (FindLaw’s Free Enterprise)
  • Do You Know about Grants.gov? (FindLaw’s Free Enterprise)
  • 5 Ways to Finance a Small Business (FindLaw’s Free Enterprise)

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