Federally-backed loan incentives like the PPP or the Paycheck Protection Program were disbursed to provide microbusinesses with the funding they needed to survive difficult economic times.
Though useful, the presence of affordable funding for small & medium companies was not an everyday thing in a market where smaller business owners often struggle to get their hands on finances.
And even after the government reserves have run out, microbusinesses will still rely on extra funding to survive and thrive in a post-corona environment.
But these difficulties faced in accessing funds is only a temporary problem according to Miventure, a crowdfunding service set to launch before the close of 2020.
According to CEO Jason Crystal, business owners struggling with standard funding programs can seek refuge in crowdfunding solutions.
Established on the principles of Regulation Crowdfunding, a small section of the Jumpstart Our Business Startups (JOBS) Act, the new company serves as a financing platform to link small business with unlicensed investors–a comparatively new resource for microbusinesses searching for financial backing from conventional banking institutions or venture capitalists.
Below, Miventure’s CEO explains why some firms can benefit more from crowdfunding when in need of extra money. He also offers clues on how SMB attitude sways in an unstable market.
“Banks often lend finances to those who do not need it,” says Crystal. “A wide gap exists between those eligible for debt and credit, and those who don’t.”
Tech-based startups fall in that group due to the belief that such digital-based firms carry a higher risk than physical stores.
Many times, the “way out” for startup tech firms that have been rejected from traditional funding sources is to partner with venture capitalists– and this presents another challenge as most investors would rather stay away from startups that haven’t gained value, Crystal explains.
But time has proven that even with a high-risk labeling, these companies can survive and thrive much like many physical stores.
Crystal further explains that in today’s digital economy, any small business can be an online business.
This explains the need to offer unswerving financial support because small businesses, both physical and digital, are central to any economy.
As the world struggles to mull over the fact that everything is going digital, funding remains a significant challenge for many young entrepreneurs looking to venture into various niches.
Regulation crowdfunding may bring new hope to this group of neglected merchants who offer equally vital services and are well-placed to survive and expand like their counterparts.
Author Bio: Michael Hollis is a Detroit native who has helped hundreds of retailers secure business loans. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.