Avoiding Scams as an Immigrant Business Owner
Avoiding scams as an immigrant business owner can be challenging. Immigrants are common prey for loan sharks. This is particularly true for immigrants who are undocumented or have temporary forms of immigration status and have difficulty accessing mainstream lenders.
Educating yourself about the types of loan scams immigrant business owners face and strategies for avoiding scams are important steps you can take to protect yourself.
What kinds of business loan scams are immigrants most likely to fall victim?
Immigrants who have just moved to the U.S. often generally start to receive lots of advertisements in the mail and on social media offering them loans and credit cards even when they don\’t have any history of credit in the country.
Predatory scammers seek out new immigrants who want to start a business in the U.S. but who don\’t have the capital to do so. Scammers will offer cash advance loans with impossible terms that can catapult these noncitizens into dangerous debt. These loan sharks also offer to help immigrants build credit or \”fix\” their credit. However, they often do so through questionable practices that end up just taking immigrants\’ money.
Immigrants can also get taken advantage of for their immigration status, for example lenders saying that they will call and report them to immigration officials if they do not pay money immediately or by having someone pose as an immigration official and demanding money to fix an immigration-related problem
What can you do to prevent becoming a victim and make sure you are avoiding scams as an immigrant business owner?
Immigrants should always do extensive research about a lender before entering into any loan agreement. Be careful and don\’t trust anyone offering to loan you money. Educate yourself about the types of loan fraud that exist. Ask any lender for their physical office address. If they cannot provide an address, it may be a scam. Don\’t pay any money or advanced fees upfront. Don\’t rely on any checks from lenders until the check clears with the bank first. Be wary of wire transfers. Contact the Better Business Bureau to ask for help.
If you are starting a business, make sure to protect yourself from scams by learning about the kinds of business loan scams and strategies for avoiding scams as an immigrant.
To learn more about how to spot and avoid business scam loans, check out this article we\’re quoted in: \”8 Common Business Loan Scams–And How to Spot, Avoid, and Report Them\”
Want to help empower immigrants with access to information about personal finance? Spread the word about Immigrant Finance!