How Could the Federal Reserve Immediately Help Small Businesses?

• The Federal Reserve has allocated $600B to help small and medium businesses to survive the pandemic.
• So far, they have only spent $2B of that money because they are trying to lend via banks…this is not working.

WHAT THE FED CAN DO TODAY TO IMMEDIATELY HELP SMALL BUSINESS:  

• Allocate just $20B of the remaining $598B to lend to the businesses that local investors are lending to, via securities-based crowdfunding platforms. The Fed co-invests with communities to help support businesses.
• This could enable at least 80,000 businesses across the country to receive up to $500,000 in funding ($250,000 raised from local investors + up to $250,000 in matching funds from The Fed).

OUR PLAN USES TECHNOLOGY THAT IS ALREADY WORKING TODAY:  

• SEC regulated crowdfunding platforms have already raised $712M from over 710,000 Americans in all 50 states.
• The process is SIMPLE:
  • The Federal Reserve allocates $20B to this program.
  • Securities-based crowdfunding platforms register with the Fed (they are already regulated by the SEC).
  • When a company raises their target amount, the crowdfunding platform notifies the Fed and matching funds are transferred.
  • All the data is reported daily to The Fed for real time transparency on the program.

WHAT CAN YOU DO TO HELP? 

• Contact your representative in Congress and demand they support the Main Street Recovery Co-Investment Fund
• Watch the video below to learn the details of the program and post it on all of your social channels.
• Share this email with people you think can help and post it on your social media channels.

1. Government tells the Federal Reserve to move $20 billion of the $598 billion remaining into the Main Street Recovery Co-Investment Fund. The Federal Reserve would oversee the Fund.
2. Online Investment Platforms apply to have access to the Fund for small businesses that raise money on their websites.
3. Small businesses will create campaigns, disclose information about the business, how much money they need and how it will be used.
4. Investors (mainly customers of these businesses) decide whether or not to fund the business and help the business hit a minimum funding target.
5. If a campaign hits the target, the platform would let the Fed know and the Fed would disperse, dollar for dollar, what the investors deployed up to $250,000 per company.
6. Investors would be paid back principal and interest on the money that they loaned. We suggest that small businesses either borrow the money or offer revenue share notes.
7. The Government would be paid back after the investors were made whole.
8. Data about the investments, how the money was used and the impact of the funds would be made available to the Government on a real-time basis.

Where did the Main Street Recovery Co-Investment Fund Come From?

During the last recession, in 2010, we went to Washington with the idea for Regulation Crowdfunding. It was meant to help struggling small businesses access capital. Since then, an entire industry has emerged. More than 2,700 companies across the USA have raised over $712 million from 710,000 local investors in communities all across the USA. This is happening on online investment platforms that are overseen and regulated by the Securities and Exchange Commission. And there has been no fraud.

Now we find our local economies back on the brink due to COVID. Our government carved out $600 billion to help but because of deficiencies with the Main Street Lending Program, PPP and EDIL only $2 billion has been deployed.

Rather than sit on that money, the government should take $20 billion (only 3% of what they have in reserve) and put it into the Main Street Recovery Co-Investment Fund. It has the ability to help over 80,000 struggling Main Street businesses in the next 90 days and it is a turnkey solution!