Business Leaders Say Small Businesses Need Crowdfunding to Raise Capital
Washington, DC – The American Sustainable Business Council (ASBC) called on the Senate yesterday to pass the CROWDFUND Act (S.2190). In a letter delivered to Senate leaders, ASBC said the legislation will help small businesses expand by creating new and better avenues to capital.
“Small businesses create two-thirds of the net new jobs in the private sector, yet banks aren’t lending to them right now,” said David Levine, ASBC’s co-founder and CEO. “We need a smart, innovative, alternative to seed and expand entrepreneurial ventures. The CROWDFUND Act will authorize small and locally owned businesses to raise money through online platforms that maintain strong protections for investors. ”
Similar to a proposal ASBC began promoting in 2010, the CROWDFUND Act includes safeguards that would minimize risk to investors while giving responsible ventures new opportunities to raise funds. The bill caps individual investments at safe levels based on the investors’ income and assets and imposes several other protections to deter and detect fraud. By keeping investor losses and fraud risks low, the CROWDFUND Act will serve both investors and entrepreneurs of small and locally owned businesses.
Additionally, business leaders across the country are endorsing the legislation:
“Traditional banks have all but stopped making loans under $250,000 to small businesses,” said Claudia Viek, C.E.O. of California Association of Microenterprise Organizations (CAMEO), a partner organization of ASBC. “This bill fills a critical gap in access to capital and enables small and micro- businesses to expand and create jobs.”
In a national poll released earlier by ASBC and others, 90 percent of respondents saw availability of small business loans as a problem. (Read the full poll results here: Small Business Owner Opinions on Access to Credit and Proposals to Boost the Economy).
“Business owners and citizens in Chicago are frustrated by the lack of funding for locally owned, independent businesses. Local First Chicago has been educating our businesses about alternatives to traditional banks," said Suzanne Keers, Co-Founder and Executive Director of Local First Chicago, a member of ASBC. "But the people of Chicago who love their local businesses need a way to invest directly in those businesses. The CROWDFUND Act could make a huge difference for our local economy.”
The American Sustainable Business Council is a growing coalition of business networks representing over 100,000 companies and 200,000 business leaders. ASBC advocates for public policies that meet the realities of the 21st century global economy.