By Debbie Gregory.

We hope that you have found the prior article on Business Loan Scams helpful.   It so important to be aware so you and your Small Veteran Owned Business do not fall prey to a scammer.  Remember that scammers often will contact you online or by phone.  Below we will provide you additional types of Business Loan Scams.

• Ghost Investors: You can receive a call about a “potential investor” lined up to provide you huge amounts of funding immediately and asking for a transaction fee.   Keep in mind when anything sounds to good to be true, it usually is a scam.  Ghost investors are more of a con trying to go after those who might be in the market for business loans and/or funding.   The scammer will act as the “agent” for a large investor, foundation, angel investor or fund who wants to give you money and make an investment in your business.

They are not too interested in hearing your plan or ideas but want to collect your private financial information online such as your social security number or tax identification number for your business.   They will say they need this private information to conduct a background check.  They also will try to obtain an advance fee of some type from you.  They want to hook you and then do a double whammy of taking your personal information and obtaining your money in advance fees.   Legitimate investors take a considerable amount of time to investigate you and they do not ask for fees.

• Loan Broker Swindlers: These scammers will promise to connect you with a reputable lender in the role of consultant of sorts.   They want your sensitive information and advance fees.

Yes, there are legitimate loan brokers out there, but the real ones will not ask you to pay upfront for their services.   Most ethical loan brokers work on a commission basis and are not paid their commission until the deal closes.  Please beware of any loan brokers who ask for their fees upfront.  If someone wants to buy your business or make a loan, there is a process and it should not cost you upfront.

• After Financing Business Loan Scams: Stay alert because after you have your loan, there are scammers who will come out of the woodwork.  Below are some of the scams after you obtain your loan:

1. Debt Relief Scam: It usually goes like this: “If you are struggling with loan payments, get out of debt with affordable monthly payments and we guarantee 48-hour approval”.   The target are people who have trouble keeping up with their loan payments.  The scammer often promises to significantly cut your loan payment or forgive all or part of it.  Once again, they will try to obtain your sensitive information and even your bank account info.   Anyone who promises you a “guaranteed approval” is usually not legitimate.  Again, they will try to obtain upfront fees.  If you are struggling with payments, talk with your existing lender and determine if you can revise the loan so the payments are more affordable.
2. Debt Collection Schemes: This is when debt collectors harass you, make threats of arrest and try to use fear to obtain money from you.    Collectors are regulated by law.  At the end of the day, they want to work out a plan with you and are not allowed to make threats.  If you feel threatened, it probably is not a legitimate collector.

There are many ways that hard working small business owners can be tricked by scammers and con artists.  We urge you to be on the lookout for the following:

• Unsolicited Contact
• Non-Traditional Advertising
• Upfront Money Requested
• Lack of a Physical Address
• Generic Email Address
• Guaranteed Approval
• High-Pressure Sales Tactics
• Too Good to be True

If you or someone you know becomes the victim of a business loan scam, below are a list of things you can do:

• Report to the Consumer Financial Protection Bureau (CFPB)
• Call local police
• Report identity theft
• Contact local credit bureaus

We urge you to be on the alert to avoid business loan scams.  As we previously stated, knowledge is power.  Take your time and confirm that you are dealing with legitimate sources.

If you are interested, we invite you to join VAMBOA.   There are not any fees or dues charged to members.  We will also allow members to use the VAMBOA seal on their collateral and website.  If you want to join, below is a link to register:

https://vamboa.org/member-registration

By Debbie Gregory.

VAMBOA, the Veterans and Military Business Owners Association, believes that knowledge is power and will protect you.  For this reason, we are bringing you this two-part article mini- series on Business Loan Scams.  Please be cautious.

As the owner of a small Veteran Owned Business, you need to be on the alert for business scams, especially those related to access to capital and loans.   There have been more scams than ever with the growth of online alternative loans that allow small business owners to access the funds they need.  Unfortunately, this creates opportunities for Internet scammers.   Various surveys have found that almost seventy percent of small businesses feel there is a greater risk of scams now compared to a few years ago.   In 2016, marketplace scams accounted for the loss of $50 billion dollars alone.

Many online and legitimate lenders have been invaluable to small business owners.   However, many hackers are running business loan scams preying on the needs of small business owners for quick and affordable capital.   They attempt to steal your money, personal information, business information by pretending to be legitimate lenders or small business loan brokers.   The good news is that there are ways to identify these business loan scams and avoid them.  If you should fall victim to a scam, you should know how to report it.

Most scammers will attempt to contact you online via email, phone, texts, direct mail, websites or search engine ads.  You must be cautious whenever anyone asks for money, personal information or your business information.  Below are a list of business scams to avoid when applying for financing:

• Advance Fee Scams:  This is when an individual or company promises easy access to low-cost debt in exchange for an upfront payment. It will include terms such as “zero interest, no credit or bad credit works, no fees, etc.”  The scammer may reference the upfront fee as a “processing fee” or a “one-time fee”.  The goal of the scammer is to get your money before approving you for this likely fictitious loan.

Advance Fee Scams are one of the most common and popular scams.  They entice the borrower by promising that anyone can qualify.  Most legitimate lenders have requirements.  The lower one’s credit score, the higher interest they will have to pay in the real world.   Often legitimate lenders do charge some upfront fees such as application fees or fees to do your credit report so you must be careful.

• Peer Lending Scams: Have you ever seen a message on Craigslist, FB Messenger, Reddit or other places that says: “Low-interest loans up to 100K.  Low credit scores and bankruptcy is not a problem”?   Often, these are scams.   There are credible peer-to-peer lenders with thousands of investors who pool together and purchase loans or parts of loans that meet their criteria.   Instead of a bank, think of it as dozens of lenders working collectively.

Typical peer lending scams often resemble advance fee scams.   These peer lending scammers will also ask for some type of upfront fee or they might also be after sensitive personal information.  Beware because they can also steal your identity.  Never ever use a money wiring services for a business loan and never make any payment in advance.

• Funding Kit Scams: Some unscrupulous online loan providers want you to believe that obtaining a business loan is so complicated, you need to pay them to walk you through the process. This is a scam!    The scammers might offer offers to obtain government grants or inside tips or tricks and offer to provide you information for a fee.

All of the information that you need to obtain a loan is easily found online and there are not any fees to use this information.  When you see words such as “free” and government grants”, it is time to run for the heels.    If you have questions that you cannot find online, ethical, and real lenders are more than happy to answer these questions without charging you a fee.  If anyone asks you to pay for information to obtain a grant or loan, it is likely they are trying to scam you.

• Credit Repair Scams: Have you ever heard offers to increase or improve your credit score by at least 100 points in a short timeframe.  Or perhaps it the offer is to wipe out your bad credit, etc.  When you are trying to obtain a small business loan, your credit history is the most important part of your financial record and used by lenders to make qualifying decisions.

You do not need to pay anyone if you want to challenge or dispute something on your credit report.  You can do this yourself and it is free.   Be wary of anyone wanting to charge you upfront fees to improve and remove negative information from your credit report.   Do not feel pressured and keep in mind that there are a multitude of legitimate lenders willing to work with you even if you have a low credit number or a brief credit history.

VAMBOA hopes that our small veteran and military business owners have enjoyed this first article.   Stay tuned for Part 2 with more Business Loan Scams.  We also want to invite you to become a member of VAMBOA.  There are not any fees or dues and you can use our seal on your collateral and website.  If you want to join, please register here:  https://vamboa.org/member-registration/

By Debbie Gregory.

To overcome the economic impact of the COVID-19 pandemic, many small businesses are being forced to seek external funding through alternative funding sources, government grants, and loans from traditional banking institutions.

You may whether small businesses normally applied for loans or is this a new behavior in response to the pandemic?

Earlier this year, Small Biz Ahead surveyed small business owners across the country to learn exactly how the pandemic was affecting their use of both traditional and alternative funding. Here is what the survey found:

Starting a New Business:

Prior to the pandemic, most small business owners were hesitant to use external funding sources.

• Less than 1% used a federal or state grant to start their business.
• 60% of all small business owners used their own personal savings to start or run their businesses.

Running an Established Business:

• 85% of small businesses sought zero external funding in the last three years.
• 28% of small business owners use their personal credit cards to pay for business expenses.
• If the business did need money, they were more likely to seek out traditional funding sources as 41% stated they would go to their main bank first.
• 25% stated that they would simply use credit cards or existing funds.

Does age affect the business owner’s thoughts on external financing?

They found that younger generations tend to be more open to applying for financing or loans though they are still a bit hesitant. However, they do typically turn to friends and family for loans first. The study found that about a third of small business owners between the ages of 18-34 currently use friends and family as their main source to finance their business. This drops dramatically for generations older than 34, just over 10% of 35-44 year olds and less than 2% of 45-54 year olds stated that they seek out loans from friends or family.

What do small business owners look for when selecting a financial provider?

The small business owners surveyed:

• 38% stated that interest rates are the most important factor in choosing where to obtain funding.
• 38% stated that the terms and conditions were the most important factor.
• 34% prefer a financial provider who they know and have a relationship.

Does gender affect where the business owner will look for financing?

The study found that men (38%) are much more likely to view an existing relationships as the most important factor when selecting a financial provider, whereas women (41%) typically go out of their way to look for less expensive funding and lower interest rates.

How Does Age Impact Funding Choices?

There was also a clear divide between the age groups:

• The 18-34 age group favored institutions that offered easy applications,
• The 35-64 age group favored institutions with less expensive loans and more competitive rates
• The 65 and over age group favored institutions that they had a prior financial relationship.

What about alternative funding (such as crowdfunding or peer-to-peer)?

According to the study, alternative financing is not used very often by small business owners in the USA:

• 2% of small businesses have used equity financing.
• 4% have used P2P (peer-to-peer) lending.

However, this is changing. Many small business owners (42%) stated that they were open to the possibility of using alternative financing in the future should the need arise. The 18-34 age group were the most comfortable with alternative financing options:

• More than 10% stated that they have used P2P lending.
• A bit over 5% stated that they have used crowdfunding.
• All in this group stated that they would consider using alternatives to traditional finance in the future.

VAMBOA, the Veterans and Military Small Business Owners Association wants to learn your opinions on financing and small business funding.  Have you needed to turn to external financing to survive the pandemic?   Please let us know by emailing us:

info@vamboa.org

If you are not yet a member of VAMBOA, we invite you to join.  There are not any fees or dues and you may use our seal on your collateral and website.   Below is a link to register to become a VAMBOA member:

https://vamboa.org/member-registration

By Debbie Gregory.

A data breech can cost companies billions of dollars in damages if the hackers are able to extract sensitive information.  These items may include credit and debit card numbers or social security numbers. The damage is also not limited to monetary costs.  There is also the negative press, drops in company productivity as everyone scrambles to handle the crisis as well as a dip in consumer confidence and trusting the company. These data breeches happen all the time to large corporations that employ very skilled cybersecurity teams and take all types of high-level precautions.  What this means is that small businesses are even more vulnerable and easy prey for hackers.  This article will provide you information on how to protect your small business from security risks like this.

Why are small businesses a hacker’s favorite target?

When it comes to easily grabbed data, a small business is the perfect prey. Small businesses typically lack strong security measures as well as the staff capable of handling hacking intrusions.

Most small business owners don’t make it a priority to:

• Monitor their server networks and data
• Ensure their Wi-Fi is secure
• Hire a true IT specialist to keep watch
• Learn about and train their employees in cybersecurity

Small business owners have a lot on their plate and cybersecurity tends to get pushed aside since most people assume that getting hacked will not happen to them. However, ensuring your company data as well as your customer data is secure, is essential for every business. According to recent reports, 60% of small businesses that had suffered a data theft were forced to close their doors within six months of the breech.

The Top 3 Security Mistakes Made by Small Business Owners:  

1.)  Trusting and using public Wi-Fi:

It is extremely tempting to jump on free Wi-Fi and work or catch up while in a coffee shop, restaurant, or public venue. However, hackers often go to these places and setup their own free public Wi-Fi hotspots to catch the unwary.  Logging into their “free” Wi-Fi provides them immediate access to the devices that you connect. Even logging in to the right network, public Wi-Fi offers little to no real security from savvy hackers.  Do not use unknown networks so you can protect yourself and your data.

2.) Not using and enforcing strong password standards

Strong passwords are incredibly important for every aspect of your life and business. This is the one area where  most people and small business owners make the most mistakes. Remembering complicated passwords can be challenging but it is worth the effort.

These password practices are not strong enough to withstand a password-related attack:

• Less than eight characters in length
• A lack of various letter cases, numbers, and special symbols – meaning not alphanumeric
• Allowing the use of the same password for multiple platforms and/or applications

Every password used by anyone at your business should be alphanumeric, longer than 8 characters in length, and only used once. You should also regularly change your passwords and utilize 2-factor authentication whenever it is available to use.

3.) Not having and enforcing a clear BOYD (Bring Your Own Device) policy:

Lots of businesses allow their employees to bring in their own electronics or mobile devices. Doing so has a lot of clear benefits for the company including cost savings and allowing your employees to be comfortable with the devices.

However, you need to have clear BYOD policies in place that include guidelines that spell out how employees can handle software updates, IT support, encrypted data options, or when and where employee-owned devices can be used for work. If you do not have such a policy, get on it ASAP! You are leaving your business very vulnerable to a data breech.

We advise you to be vigilant. There are many things that you need to do to protect your business from a hacker. However, the risks are simply too great to ignore proper cybersecurity.

If you are not already a member of VAMBOA, the Veterans and Military Business Owners Association, we invite you to join.  There are not any dues or fees and members can proudly display the VAMBOA seal for their collateral and website.  Below is a link to register for membership:

https://vamboa.org/member-registration

By Debbie Gregory.

Let us begin with a frightening statistic!  Do you know that every three- and one-half seconds brand new cybersecurity threats arise?  Small businesses are typically the targets for these threats as they typically do not have strong cybersecurity practices. This article will review where the most common threats come from so you can be forewarned and forearmed.

1.)  Passwords:

A hacker with your password can access any of your private information and data. Hackers learn these passwords in a variety of ways.  The most common way is called a “brute force attack.” These types of attacks utilize specially designed bot programs that generate and try every possible combination of letters, symbols, and numbers out there to obtain your information.

How can you protect against this type of attack?

Creating and using a unique password of upper and lowercase letters that is at least ten characters long can substantially slow down these brute force program attacks. It can take them years to find your password if it is more complex.  It is also important that you do not use the same password over and over and you frequently change your passwords.

2.)  Phishing

Phishing is a technique used to trick people into willingly handing over their information to a hacker. These types of attacks target all types of personal data including, but not limited to passwords, bank account numbers, credit card numbers, Social Security numbers, and more.

How are these types of attacks performed?

Usually a hacker will pose as a reputable source asking their victim to allow them access to their computer or to click a specific link. They impress upon their victims that the reason for doing so is incredibly important and they must provide key personal information. These types of attacks happen via phone, email, and text message.  Often, they have what appears to be a legitimate email address but when you really look at it, you will see they are not who they pretend to be.   Be on the alert and never ever click on a link or open a document from someone you do not know or a generic email address because they are after your personal information.

3.)  Pharming:

Pharming is the term for website spoofing. In this type of attack, the hacker has compromised the naming system in the website’s server so that a visitor to the legitimate site is instead redirected to a fraudulent one. Once on the fraudulent site, the victim is prompted to provide their sensitive data, such as a credit card number or Social Security number.

4.) Malware

Malware is malicious software that is specifically designed to gain access to or to cause damage to a device. The goal is usually stealing personal data such as passwords, bank account numbers, credit card numbers, Social Security numbers, and more. Malware comes in many forms from adware to spyware to Trojan horses. All are extremely dangerous.

These are only a few of the potential risks your business faces. Other common attacks include point-of-sale hacks, drive-by-downloads, and ones that are so new they haven’t even been named yet. The best thing you can do is to take the time and effort to create and enforce strong cybersecurity policies. Stay on top of what is happening in the world of cybersecurity and help protect yourself, your employees, and your business.