Fake Business Loan & Grant Scam via Wire Transfer
Fraudulent lenders demand wire transfers for 'insurance,' 'collateral,' or 'tax' fees before releasing a promised business loan or grant that never exists.
Part of: Fake Business Loan / Grant Scam
Last reviewed: 5 July 2026
Wire transfers feel appropriately serious for a business financing transaction, which fake lenders exploit by framing an upfront wire request as a normal part of releasing loan or grant funds.
How this scam works on wire transfer
After approving a business owner for a loan or grant with suspiciously little underwriting, the scammer explains that a wire transfer is required to cover loan insurance, collateral verification, or an advance tax payment on the 'winnings' before the funds can be released. They provide official-looking loan documents and a bank account for the wire, often using a name similar to a real, well-known lender or a plausible-sounding government fund.
Because wire transfers move quickly and are difficult to reverse once received, by the time the promised loan or grant fails to arrive and the business owner tries to follow up, the scammer's phone number is disconnected and the wired funds cannot be recovered. Some scammers repeat the ask, requesting a second wire to cover a newly invented fee before finally cutting off contact entirely.
Common red flags
- A loan or grant approval that requires a wire transfer before any funds are disbursed
- Fees framed as 'insurance,' 'collateral,' or 'advance tax' on money not yet received
- Loan documents that reference a well-known lender or government program without matching official details
- No verifiable licensing information for the lender in your state or country
- A second or third fee requested after the first wire is sent
- Pressure to wire funds same-day to avoid losing the approval
How to protect yourself
- Never wire money to receive a loan or grant; legitimate financing deducts any fees from the disbursed amount
- Verify the lender's license through your state or national financial regulator before proceeding
- Confirm any referenced government program through its official website, not the lender's materials
- Call your bank before wiring funds and ask about known scam patterns for business loan fraud
- Consult a Small Business Development Center or accountant before wiring any advance fee
- Treat a request for a second wire after the first as certain confirmation of fraud
How to report it
- Contact your bank's wire fraud department immediately after sending funds
- Report to the FBI's Internet Crime Complaint Center (IC3.gov)
- File a complaint with the FTC at reportfraud.ftc.gov
- Report to the Consumer Financial Protection Bureau at consumerfinance.gov/complaint
Frequently asked questions
Is it normal to wire money to receive a business loan?
No. Legitimate lenders deduct any origination or processing fees directly from the loan proceeds; a request to wire money before receiving funds is a hallmark of a loan scam.
Can a wire transfer sent to a fake lender be reversed?
It's unlikely once the funds are withdrawn, but contacting your bank immediately and reporting to IC3.gov gives the best chance of a recall or investigation before the money is fully moved.