3 Things You Should Know About Small Business: August 1

NEW YORK ( TheStreet) -- What's happening in small business today?

1. Small business lending drops in June. Loans issued to small businesses in June fell to their lowest level in eight months, suggesting that the economy's recent stall is likely to persist, according to Reuters.

The Thomson Reuters/PayNet Small Business Lending Index measures the overall volume of financing to small U.S. companies each month. It fell in June to 98.5 from 103.8 in May.

When compared to a year earlier, borrowing rose just 2%, the slowest year over year pace since July 2010, Reuters says.

2. This bank check scam is gaining favor with fraudsters. Bank fraud comes in a host of ways, but the latest scam should have e-commerce small-business owners on the lookout. For those businesses that still take paper checks, beware of "overpayment fraud."

A report out from Western Union ( WU) says con artists are fleecing people via online sales transactions, using overpayments as the bait.

The way it works is fraudsters typically purchase a product or service online and send the seller a legitimate-looking check for the amount higher than the price. (Of course with some made up excuse as to why the check was for more money than the item cost.) They then tell the seller to deposit the check and wire them back the excess money. It is likely days or weeks later, after the seller has sent the perpetrator money, that they figure out the original check was fake.

The scam is apparently so prevalent that it's listed among the top five crimes in a 2011 Internet Crime Report published by the FBI, Department of Justice and National White Collar Crime Center, according an article on TheStreet.

"It's a common misconception that only people who buy online are at risk for fraud, but sellers are at risk too," says Shelley Bernhardt, director of consumer protection at Western Union, in its overpayment fraud report. "They're susceptible to clever con artists who use counterfeit checks to get them to send real money."

3. What can you learn from a petting zoo? Under the guise of a happy place for kids, petting zoos can offer small business owners "ingenious" strategies worth borrowing to improve business, says Vistaprint social media manager Jeff Esposito.

The first is to stand out. While many of the zoos are connected to farm stands or local markets, the attraction of the petting zoo makes them stand out from competitors. The lesson here is figure out something in your own business that can help you stand out and keep customers coming back.

Remember that engagement is "key," Esposito writes. The heart of a petting zoo business model is the customer engagement with the animals. Small businesses can extrapolate from this point and bring it into their own business. Greet customers as they walk in the door if you own a bricks and mortar store or offer recipes for grilling if you're a propane grill business.

"Making your customers feel like they are valued and wanted will let them know you care," he writes.

Figure out how to augment your customer's experience even further.

"Baby animals are cute and cuddly, of course, but have you ever noticed that there is always the option to feed the animals as well? If so, you have probably noticed that this extra perk can run anywhere from a quarter up to a dollar or two and you probably have never noticed the upsell," Esposito writes.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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