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Financial aid inquiries on the rise along with scams

While the economic downturn has hurt businesses worldwide, in the Westlock area the lull has caused a sharp spike in financial-aid inquiries and an up tick in the number of online scammers preying on inexperienced entrepreneurs.
Tawatinaw Community Futures manager Kelly Harris-Martin.
Tawatinaw Community Futures manager Kelly Harris-Martin.

While the economic downturn has hurt businesses worldwide, in the Westlock area the lull has caused a sharp spike in financial-aid inquiries and an up tick in the number of online scammers preying on inexperienced entrepreneurs.

Community Futures Tawatinaw is a not-for-profit federally-funded program that provides business services, such as financial aid, business plan assistance and general business counselling to small- and medium-sized businesses. And staff at the Westlock office say that in their rush to secure financial aid, many business owners throughout the region who look online will become ensnared in one of the increasingly prevalent and shady online offers.

“We used to get maybe four or five a month and we’re getting two a day. It’s a significant spike in the number of inquiries,” Community Futures Tawatinaw manager Kelly Harris-Martin said.

Small businesses don’t have the same sort of financial backing as many large corporations and tend to be acutely affected during difficulties, like the current financial downturn.

“When there’s a downturn in the economy and there are layoffs, we see people looking to self-employment as a more viable option,” she said.

“Certainly self-employment can be a viable option in a downturn, but there are not a lot of grants for startups.”

During economic downturns, online scammers typically focus on scams geared towards those who are trying to keep their business afloat.

“The problem is that there are government grants available, but government grants are not traditionally available for startup businesses, debt consolidation or for the purchase of inventory,” Harris-Martin said.

“Unfortunately, there are a lot of unscrupulous people out there.”

Although there are many variations to the online scam, most frequently, Harris-Martin has seen two types: the business-plan scam and the grant-resource scam.

In the first, scammers advertise the availability of grants online. When the victim responds, the website requests a copy of their business plan. Upon examination, the business plan is deemed unsatisfactory for application. Fraudsters then offer to revamp the victim’s business plan for a fee.

The second scam involves book or list sales. The victim believes they are receiving a book or list containing thousands of potential business grants. Upon delivery it becomes apparent that the victim is maybe eligible for one or two grants, but the transaction has been made.

In both cases, the victim pays for access to grants that they are unqualified to receive or have no chance of obtaining.

The strongest indicator that a grant or grant resource may be fraudulent, Harris-Martin explained, is the information source.

Most legitimate grants are related to a specific industry and almost all are well-known or come from a government-affiliated source.

“Most of those grants are geared towards existing businesses that are looking to improve innovation and increase their workforce,” she said.

“At the end of the day, it comes back to the old adage of, ‘if something seems too good to be true, it probably is.’ If people are looking for legitimate government grants they need to start with the ministry that oversees the industry they’re in.”

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