Small business owners in Iowa are being warned about con artists who’re trying to sell them services that are already free. Joe Folsom, district director of the U.S. Small Business Administration, is seeing an uptick in the number of shady attempts to convince merchants to part with hard-earned cash to get help in landing S.B.A.-backed loans.
“Particularly now with a lot of the initiatives that are underway under the American Recovery and Reinvestment Act over the last year, small businesses in particular have seen a number of scams,” Folsom says. “Some folks view them as ways to make some money.” Folsom says what the scammers are doing is at least unethical — and in many case, it’s also illegal.
Folsom says they’re “charging for items and services that either are free or charging exorbitant prices for those items and services that are either free or nominal in cost.” In one version of the scam, a firm allegedly guaranteed a small business would get SBA funding if they paid the fee, even though the agency doesn’t give preference to specific companies or clients.
“At least with a number of programs and services the SBA has, the information and the tools that we have, for the most part, are free,” Folsom says. “If they have questions, they should reach out to our local office.” If Iowa business owners have questions or think they may’ve been taken, they can reach the SBA’s office of the Inspector General at “www.sba.gov/ig” or call (800) 767-0385.