Lawmakers propose crowd funding bill to help small businesses

Lawmakers propose crowd funding bill to help small businesses

Legislators say traditional ways of raising funds for businesses are now limited, and they say this bill will open doors for some entrepreneurs.
The Alabama Senate passed a crowd funding bill, which would allow people looking to start small businesses to raise funds through social media and other means.
The Alabama Senate passed a crowd funding bill, which would allow people looking to start small businesses to raise funds through social media and other means.
"For a small business trying to get off the ground, raising the startup capital is definitely one of the  most difficult challenges,” said Mike Riddle, owner of PCP Design Studio.

Many business owners will tell you, starting a small business is no easy venture.  There's a lot a stake.

"Whether you're looking for a small investment from a bank or a personal loan from friends and family there are a lot of decisions that you have to weigh very carefully when you're trying to raise money for a business,” Riddle said.

With the crowd funding bill, lawmakers are looking to make those decisions a lot easier. 

It would allow small business owners more fundraising options.

"I think crowd funding is great way to raise money for small businesses that are trying to get a start.  Being able to raise small bits of funds from small parties is a good alternative," said Riddle.

That includes advertising and raising money through social media and the Internet. 

Under the bill, small business owners can raise up to one million dollars from Alabama investors. 

"There's a lot of risk there's a lot of anxiety.  And anything that people can do to help alleviate that, it's good for us, it's good for the economy,” said Dothan Downtown Redevelopment Authority Executive Director Jansen Tidmore.

As with traditional fundraising, small businesses can run the risk of fraud through crowd funding.  But most say the benefits outweigh those risks.

"These small businesses are the life blood of our economy.  Without them, we don't function, we don't move forward, we don't make the progress that we all want,” Jansen said.

And some say Dothan is a place that would cash in on those benefits.

"When you look across Dothan and the businesses that come to mind, probably 99% of them are small businesses,” said Jansen.  “And even some of our larger employers in Dothan are former home-grown businesses.”

The House must now vote on the bill, and then the governor must sign it. 
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