5 Dangerous Small Business Loan Scams To Look Out For This Year

There are several dangerous small business scams to look out for this year. Scams in the form of phone calls, business emails, and checks are becoming fairly common amongst malicious fraudsters. Many of these scams target company owners that desperately need small business loans or financial support. These fraudulent scammers will try and seek personal identifiable information (PII) from small organizations. As a business owner yourself, this means you should stay current with the latest business loan scams to fortify your company from potential fraudsters. More so, research all lending options and companies to ensure your small business finances stay secure. Read on to learn about the different types of dangerous small business scams to lookout for this year.

Sly Loan Brokers

Some of the most common small business loan scams arise from sly brokers. A legitimate broker should help you choose the right type of loan, prepare all the application paperwork, and connect you with qualified lenders. While this financial practice is lawful, it can quickly turn into a scam. You should be wary of any broker that asks to get paid upfront for their service. After all, most legitimate brokerages operate on a commission-based model. This means the broker will obtain a specific percentage of the entire loan after closing. Brokers that ask for an upfront payment, on the other hand, may be looking to steal or act unethically with your funds. Certainly, look out for sly loan brokers that conduct small business scams.

Lenders With Generic Email Address

Next, small business loan scams often involve business lenders contacting you from a generic email address. Whenever you get a suspicious email from a business lender, take a good look at their email address. Typically, lenders that conduct business illegitimately utilize fake email addresses. Look out for common misspellings or similar names in the email addresses. In addition, visit their website and verify the address from the webpage is the exact same email received in your inbox. If you ever feel like something is off, delete the email without opening it. These fraudulent lenders send scandalous emails with harmful links to compromise the security of your computer. For sure, lenders with generic addresses are small business loan scams to look out for this year.

Ghost Investors

Dangerous ghost investor scams also targeting small businesses this year. This scam involves fraudulent, unnamed investors, who appear willing to put money in your business. They will ask for a fee to set the plans into motion. It can be difficult to spot this type of scam, since every business owner wants outside support from external investors. A good rule of thumb is if the offer seems too good to be true, it likely is. Ultimately, it is easy to avoid ghost investor scams with common sense and skepticism in mind. If your small business is in need of financial assistance, seek support from an experienced professional instead. Definitely, several dangerous small business loan scams originate from ghost investors.

Illegitimate Experts

You should also be wary of dangerous small business loan scammers that pose as illegitimate financial experts. These scammers provide inaccurate financing for your business, that can lead you into bad deals. They’ll try to downplay your doubts and claim to be a financial expert willing to help. Some supposed-experts may even try to offer consulting services to your small businesses for even more money. To prevent these hazardous forms of fraud, it is important to perform research and identify certified financial experts with the proper credentials. Of course, consider using a background search service to ensure the loan provider is legit. This way, you can build a team, develop professional business relationships, and run your organization without worry. Surely, many business loan scams originate with illegitimate financial experts.

Online Phishers

Moreover, online phishing small business loan scams impact thousands of businesses every year. Most phishers call or email you claiming to be from the treasury department or Small Business Administration (SBA). They will continue to offer your business grants and stimulus payments in exchange for your confidential, personal information. They may ask for social security numbers, credit card information, or other sensitive about your bank account. Then, scammers use this information to apply for small business loans on your behalf. If this happens, you could end up being responsible for paying it back. If you ever encounter these types of notices, the treasury department recommends contacting the FBI immediately. Of course, some of the most manipulative and deceptive small business loan scammers are online phishers.

There are several dangerous small business loan scams to watch out for this year. Certainly, ensure you are receiving secured business loans to protect yourself from financial threats. First, watch out for sly loan brokers requesting payment upfront before providing their services. Additionally, check generic email addresses from business lenders for common misspellings. Next, ghost invest scams try to offer opportunities that are too good to be true. Also, avoid with illegitimate financial experts  to stay clear of bad deals. Of course, online phishers target personal information from small businesses. Read the points above to learn about the dangerous types of small business loan scams to be on the lookout for this year.