How to spot business grant and loan scams
Government grants are free to apply for. Anyone charging a fee, guaranteeing approval or asking for your bank login is running a scam. The seven red flags and what to do instead.
Updated September 2026. Details vary by lender and change often; confirm terms with the provider.
The seven red flags
- A fee to receive a grant. Government grants never charge. Legitimate private programs occasionally charge a small application fee (the Amber Grant does), but never a “release”, “processing” or “insurance” fee after you win.
- Guaranteed approval. No real grant or lender guarantees anything before underwriting.
- Unsolicited contact. Agencies do not cold-call, text or DM you about free money.
- Pressure and secrecy. “Offer expires in one hour”, “do not tell your bank”.
- Requests for bank login credentials rather than statements. Real lenders use read-only verification services or ask for PDFs.
- Payment by gift card, wire, crypto or peer-to-peer app.
- Lookalike domains like usa-grants-gov.com or sba-grants.org. Official sites end in .gov.
How legitimate funding actually works
- Government grants: you find the program on an agency site or Grants.gov, apply through the official portal, and hear back weeks or months later. Free.
- Private grants: you apply on the sponsor’s page. Awards are announced publicly.
- Lenders and funders: you submit an application and bank statements; if approved, fees are disclosed in the agreement and deducted from proceeds. No prepayment.
- Matching services like ours: free to you; we are paid by partners. We never ask you for money and never ask for account passwords. See our disclosures.
If you already paid
- Contact your bank or card issuer immediately to dispute.
- Report to the FTC at reportfraud.ftc.gov and to your state attorney general.
- Change any passwords you shared and set up bank alerts.
Where to get real help
Free, official small-business help: your local SBDC, SCORE chapter, Women’s Business Center, VBOC or MBDA center via sba.gov/local-assistance. Funding options you actually qualify for: the 60-second match.
Frequently asked questions
Someone from a 'federal grants department' called and said I was pre-approved. Real?
No. No federal agency calls or texts businesses to award grants, and none charge a processing fee. Hang up and report it at reportfraud.ftc.gov.
Is it a scam if a lender asks for a fee before funding?
Legitimate lenders deduct origination fees from the loan proceeds or bill them at closing. A demand to wire or prepay a fee before you receive anything, especially by gift card, crypto or Zelle, is the signature of an advance-fee scam.