Bank loans are all well and good, but not all entrepreneurs can get one, and sometimes the challenges outweigh the benefits. What if, instead, you could get a loan directly from the community of consumers and supporters who are most invested in your success?
Community Sourced Capital (CSC) offers that very opportunity, providing loans to small businesses using capital sourced directly from people in their community. Businesses run campaigns on the CSC platform and invite supporters to purchase $50 increments of the overall loan, which they call “Squares.” “Squareholders” are then paid back as the loan is repaid.
Here, guest bloggers Danny Lampton and Emily Triggs outline four unique benefits of a community-supported loan:
1. Use trust as collateral
Together, we’re transforming how people support their local economy. Nothing is more telling than dozens or hundreds of people putting their hard-earned money to work for a local business. Unlike the kind of collateral that most bank lending requires, “social capital” represents the trust instilled in a business by a community of friends, customers and participating citizens.
2. Gain brand ambassadors
Each lender becomes an advocate to help spread the word about your business because they have a deep interest in your success. They are local lenders of the truest kind, and they’ve chosen your business to reflect their values. For example, in Oregon Plywerk has 196 squareholders, North St Bags has 71, and Happy Cup Coffee has 86.
3. Hone your message
The campaign doubles as a marketing mechanism, empowering business owners to see with fresh eyes what is resonating with supporters, and fostering a deeper relationship between entrepreneurs and customers.
4. Join a network
When you run a CSC campaign, you’re joining a thriving network of community businesses and lenders whose goal is to help you succeed. And the proof is in the communal pudding: over 90% of businesses have been successful in getting their loan funded. The resulting ecosystem of revolving goodwill ultimately proves just as valuable as the money raised.
We can agree that financial capital plays a key role in the success of small businesses, and small businesses play a key role in the success of our communities. Let’s connect the dots and source capital from communities, for communities.
Learn more at communitysourcedcapital.com