Category: Finance

Regulation CF and Small Business Finance

Small Business Drives Economic Growth

Despite being the strongest drivers of growth in the U.S. economy, small businesses face immense challenges garnering funding from traditional sources like venture capital firms, angel investor groups, or debt financing. 90 percent of small business owners still believe that banks are the first stop for business financing, despite more than a 30-year history of banks decreasing the number of their loans going to small businesses. Since small businesses aren’t the only ones struggling for financing – startups, entertainment projects, musicians, and others face similar challenges – the new (and popular) crowdfunding industry has increasingly filled the funding gap. 

Traditional Lenders Overlook Small Business

New business owners usually aren’t the best candidates for traditional small-business loans from banks or other funding sources, which typically require collateral, years of successful operation and excellent personal credit. Even if funding were approved, new entrepreneurs may not have the resources to begin making loan payments immediately. Rewards-based crowdfunding is an alternative to traditional small-business financing and provides the means to transform promising ideas into a profitable reality — without having to pay back a penny.

The Crowdfunding Model Works Well For Small Business

Small businesses that have a loyal customer base or large following can investigate the newly passed Regulation Crowdfunding. This new form of equity crowdfunding — which is the result of the new Title III of the JOBS Act — allows companies to raise up to $1,000,000 each year, from investors for their businesses, using crowdfunding platforms. You agree to sell stock in your business and can offer those shares to anyone. However, there are limits on what individuals can invest based on their income. The transactions are done through Web-based platforms — which will both help keep you compliant with all of the laws and rules and will also take a commission on the sale of the stock.

Regulation CF is Perfect for Small Businesses

This form of capital raising is especially attractive to “main street” businesses — which may have a great history and engaged customers, but find that banks aren’t willing, or able to lend to them. This model exists in many other countries, and we see local food-based businesses, bars and pubs, art and creative studios and other product based companies taking advantage of these models and raising on average about $700,000.

Crowdfunding Can Be A Catalytic Funding Event

Crowdinvesting can supply needed capital for equipment, growth capital or for strategic hires. In many cases, it becomes the on-ramp to other more traditional models of financing as a catalytic event. Some savvy small business owners have learned to leverage small early-stage investments through crowdinvesting to increase their bargaining power and get more money from venture capitalists or others later. Whether a tool to provide small funds to launch a startup or as an alternative to the high costs of IPOs, these new rules expand the financing options available to startups and small businesses across the USA.

Black-Female Serial Entrepreneur Raises over $110 Thousand Through Crowd Investing To Create The first Black-owned Real Estate Crowd Investing Platform In The United States

The JOBS Act of 2012

Crowd investing is being made possible by the Jumpstart Our Business Startups Act, or JOBS Act, a law intended to encourage funding of small businesses and real estate development in the United States by easing many of the country’s securities regulations. It passed with bipartisan support and was signed into law by President Barack Obama on April 5, 2012.  

Crowd Investing for Everyone

On May 16th, 2016 Title III, the regulation crowdfunding act went into effect and the floodgates of capital aggregation have been open to the Black community for the first time in History.  Rodney Sampson, an entrepreneur, educator, and journalist calls “Title III Regulation Crowdfunding the single most important legislation for African-Americans since the Emancipation Proclamation!”

Buy The Block

Crowd investing through Buy The Block allows community members to invest in businesses, residential and commercial real estate with their community peers to build a self-sustained business/investment ecosystem for disenfranchised communities and neighborhoods to build community equity and personal wealth. Buy the Block is the first foray for the Black community into the multibillion-dollar global real estate crowd investing industry as an owner.

Why Crowd Investing

Businesses new and old, small, and large, are now incorporating crowd investing to change the paradigm of urban economic development.  The capital formation playbooks have changed under the weight of the rising tide of “crowd capitalism”. The interest in how to effectively implement crowd investing to is reaching new and dizzying heights every day and Buy the Block is at the forefront of this innovation.

Funding “Black Girl Magic” Through Nail Spas

According to Nielsen Black women have experienced steady growth in income, population, and educational attainment, according to the study. Between 2007 and 2012, Black female entrepreneurs have grown by 67 percent. In education, 64 percent of Black women graduating from high school go straight to college, while 23 percent over the age of 25 have a bachelor’s degree or higher. But On average, black female-led startups raise just $36,000 of outside funding which amounts to 1 percent of VC funding.

Buy The Block intends to transform the relationship between Black female entrepreneurs and access to capital through with their Nail Spa Initiative. Buy The Block is on a mission to fund 12 Black-owned nail spas over the next 12-24 months including the commercial real estate where the spas sit.   

Why does CrowdInvesting matter in this market?

Many inner-city Black communities are retail and food deserts, which means that they lack access to some of the most basic necessities in their communities. These communities have very low Black-owned retail businesses and own even less commercial real estate. Black homeownership is at its lowest level since the 1960’s fair housing laws were enacted, and even though Black start businesses at a high level over 75 percent of them are undercapitalized. The best thing about CrowdInvesting with Buy The Block is that it focuses on solving issues on the inner-city market and allow people to become investors for just $100.  

If you want to find out more about CrowdInvesting or you want to support the 12 Nails Spas initiative, just visit Buy The Block to find all the details and information needed to bring our community project to reality!

JOIN THE MOVEMENT!

Did you join the movement? 

www.buytheblock.com 

Posted on December 13, 2017 By Staff With 0 comments

It’s True! More African Americans Are Investing in the Stock Market

african_americans_investors_stock_market

A recent national study by Chicago-based Ariel Investments shows that more black Americans are investing in the stock market. For years, blacks stayed away from stock investments, but that trend is beginning to change.

67% of Blacks are investing

According to the study, stock market investing has grown among the black population over the years. In 1998, 57 percent of blacks were investing in stocks or stock mutual funds. By 2010, that number had grown to 60 percent, and today 67 percent of blacks invest in stocks or stock mutual funds. One reason suggested is that more employers are offering 401K programs for their employees. Since employers match 401K deposits up to various amounts, black employees consider this a very important reason to invest and grow wealth.

Investment attitudes different based on race

Investment attitudes and behaviors differ between blacks and whites. Blacks and Hispanics invest less money, and their investments are in safer yet low-returning assets, making their wealth levels about 90 percent lower than the wealth levels of median whites, even when their level of income is only 40 percent lower. This has an effect on the growth of overall wealth.

But wait, there’s more!

In addition, while blacks always considered their homes to be their “best overall investment,” that, too, is changing, falling from 61 percent in 2004 to its current level of 37 percent. How they view stock investing, however, is changing in the opposite direction. In 2004, only 28 percent of blacks felt that stocks were their best overall investment. But in the recent survey, that number increased to 41 percent.

What all of this may point to is closing the gap in wealth inequality between black and white Americans as the upward trend for more black investors in the stock market continues.

Would you like to join an investment group? Click here.
For more details about the study, visit www.arielinvestments.com/content/view/3006/1850/

 

Posted on December 6, 2017 By Staff With 1 comment

FIRST BLACK-OWNED REAL ESTATE CROWD INVESTING COMPANY IS SHOWING EVERYONE HOW TO BUY BACK THE BLOCK; BLACK COMMUNITY IS EXCITED

Crowdfund Your Way to the Top!

Little drops of water can run into great pools, and there is power in numbers and these form the premise of crowdinvesting. Recall those charity dinners where lots of money is realized for a good cause because loads of different individuals or organizations contributed their widow’s mite to the coffer? A similar scenario plays out in crowdinvesting. The good part is that the whole process is regulated and backed by laws to protect all the players.

Now, even though crowdinvesting, especially real estate crowdinvesting is a relatively young venture, it has gained many grounds in that short period. Why do you think that is the case? It offers the average person the opportunity to own properties that they would not have been able to hold or sell otherwise. A few years back, you hardly find individuals venturing into real estate, except, of course, the bourgeoisie and the corporate multimillion enterprises. Things have changed since then.

You can make more money, in the long run of course. You get to invest and contribute positively towards the betterment of the lives of numerous people. You would be helping to keep the dream of shelter for ‘all,’ a reality. You would have done something you and your future generation would be proud of for years to come. You can beat your chest in years to come and say ‘yes, I was here,’ in addition to making money.

Although it sounds risky, and it probably is, but come on, what worthy undertaking in life is not fraught with risks? However, as I mentioned previously, the laws and regulators are there to guide and protect you. Besides, BuyTheBlock.com wants to be around in this business for years to come, leading investors like you to greatness.

Own The Block

The real estate investors on BuyTheBlock.com are called BlockVestors, apt right? I love the title myself.

BlockVestors can invest as little as $100 in equity or debt securities. You or anyone else can participate, and you do not need to be accredited.

You pay nothing to register as a BlockVestor. All you need do is register on the website, browse, review any of the available offers, get whatever information you need about the offer with a click, and sign any agreement electronically. Then you purchase your shares whenever it suits you. Social media can be used to publicize the properties you are buying, owning or selling. Very simple right?

Oh, what if you change your mind? There is room for a refund so far as you do that 48 hours before the offer closes. Oh, I almost forgot this tiny piece of information, your returns! This is distributed to all the BlockVestors within the specified period, depending on whether the investment is equity or debt.

Sell The Blocks

You know, there is this freedom associated with Buy The Block kind of crowdinvesting. Another interesting point you should know is that you have the opportunity of becoming a Block Developer at Buy The Block. As such, you can raise $1.07 million for any real estate project and or business that includes real estate over a year period via Buy The Block.

Simple step too, create an online account, provide the property information, followed by some paper works, then after the due diligence protocols and approval you are on your way to becoming a Developer on Buy the Block. Afterwards, you publicize, notify your group of BlockVestors who in turn can invest once the property becomes open for investment.

The whole process is something you can begin once you make up your mind, it does not take much to create your online profile or start block offer.

Offer Categories

Variety is the spice of life. Take a look at the various categories available on Buy The Block.

  • Office category
  • Retail category
  • Industrial category
  • Multi-family residential category and
  • Single-family residential category

No matter your tastes and interests, you are covered. These types, along with the latest offers are beautifully and proudly displayed on BuyTheBlock.com so you can quickly make the right choices.

Why not take that leap of faith? You have nothing to lose really. You can carry out your research on all the other parties involved just to be sure you are at the right place with the proper investment.

Please visit www.buytheblock.com to get all your burning questions answered.

Knowledge is power. Whatever you decide, Buy the Block will work with you every step of the way. If you encounter any problem along the way, they are only a click away. You can also email or call customer care representatives.

Finally, be sure to invest and invest wisely to secure your future and that of many others.

BUY THE BLOCK  A SPACE TO INVEST IN REAL ESTATE WITH YOUR PEERS

Posted on November 22, 2017 By Staff With 0 comments

The #1 Financial Principle YOU MUST KNOW

The #1 Financial Principle YOU MUST KNOW

 

Financial literacy is not just about knowing how to save your money.

Anybody can do that.

Financial literacy is about knowing how to — USE money.

Look, we know that the average White family in the U.S. has 13 times more wealth than the average Black family1 with Whites at $144,200 compared with Blacks at $11,200.

The income of the average educated Black income is $43,300. For Whites, its, $71,300.

Do not be confused by the difference in wealth and income.

Wealth is the total sum of your assets (things you own with value i.e. houses, businesses, stocks) MINUS your total debt.

Annual Income is merely the amount of money you make in a year.

Of course, most of that wealth gap can be attributed to historical racial oppression:

The long history of Black exclusion by Whites from homeownership2, education3, and jobs4 worked to keep Black folks from generating and maintaining wealth.

But you knew the wealth gap existed before you read this.

That’s not why I’m here.

I’m here to tell you that real financial literacy is about knowing how to — USE money & how to THINK with money. It’s using your money like little soldiers, sending your dollars out on a mission to recruit and capture more dollars.

Let me let you in on an often forgotten secret…

Black people save.

Black people are responsible.

Black people are tremendously intelligent.

The problem is not that we don’t know how to save money or that we only care about Jordans’.

The problem is that saving is not enough.

Saving is only one aspect of financial literacy.

It’s like you’re learning to read and write again- you finally learn where the Period goes in the sentence…Good. But there are key principles that you still need to know in order to actually become literate.

I want to share with you the # 1 key financial principle that you must know. It’s time to learn the rules of money. I’m so grateful someone shared the game with me back when I thought that if I just play by the rules, get my Master’s degree, then I’ll be alright.

SMH.

Back when I didn’t understand the Rules of Money, I found myself standing in the EBT line like so many of our people. I was demoralized… I mean, I never went to jail, I got an education, a Master’s, networked, treated people nicely….

 

I never knew The System was not built to reward Black people for being educated and hardworking. The system was built for people who know and play well by the Rules of Money.

 

Like it or not.

 

That’s why I’m sharing this with you.

Still though, I hear too many people talking about how Black folks will never be able to overcome the wealth gap, how Whites will destroy whatever Black people build, or how there is nothing Black people can do to live better if government does not intervene. It’s infuriating to me.

The problem: These naysayers are often right.

However, this Does Not Mean that Black people should be doing NOTHING but marching.

Why? Because there ARE ways to GENERATE WEALTH for the average Black family if we understand the Rules of Money.

White folks are not stopping you from reading this. They will not stop you from investing, either.

You have tremendous Power.

If you start with the #1 financial principle, you can enhance what you know and generate wealth for yourself and our community.

The #1 financial principle I want to share with you is: LEVERAGE.

Let me ask you a question:

I want you to really imagine that debt collectors are knocking down your door, you’ve been stressing for months, your debts fall into default mode. You can’t sleep.

Let’s say your total debt is $60,000 (student loans, credit cards) & your total annual expenses are $40,000. You’re having a hard time finding work.

If you had $60,000 dollars in debt and you were given $100,000 to use any way you want, how would you spend the money?

Would you pay the $60,000 debt, then invest the rest in a business?

Bad Idea.

This decision shows a lack of understanding of financial principle #1- LEVERAGE.

Here’s why:

If you completely pay off the debt right now, you just lost $60,000 and now only have $40,000 to work with.

$40,000 in free money sounds great don’t it? Especially to someone who couldn’t sleep only nights before because of crushing debt.

However, there is a bigger picture at work.

Financial Leverage= using a small amount of money to acquire assets that generate larger amounts of money.

You are going to purchase an ASSET. Assets are things that make you money. For example, when you purchase a stock, every year that stock will pay you just for owning it in the form of interest and dividends. This is what makes the stock valuable.

After you purchase the asset, you are going to make that asset pay off your debt for you.

Here’s What You Do With The $100K:

First, pay down your debt to the point where it falls out of default. THEN STOP. Let’s say this requires $10K.

You will keep up monthly payments so that you are slowly paying down your debt. Your monthly payments on this loan are $800.

Now you have $90K left. You are about to create a debt plan that applies LEVERAGE.

With the $90K, you go to a bank and finance a rental property. You will put 20% down on a property in a great, affordable location. The property cost $200K.

20% of 200K means that you will put down $40K to purchase the home. You’ve done your research and see that the mortgage payment plus all expenses is $950 (assuming a 3.5% interest on the mortgage).

You also know that you can rent out this property for $1950 a month.

This will create a profit of $1000 each month.

That means that you just used $40K to acquire a $200K asset. You generate $1000 each month off of the asset ($1950 rent-$950 you owe to the bank for the mortgage).

You use this $1000 a month to pay down your $800 monthly debt in credit cards/student loans. This is applying LEVERAGE.

Think about it- If it cost you $800 a month to pay down your $50K credit card and student loan debt, that means you will pay off the debt in 5.2 years.

Now how long will people be renting your house?

You will still be able to rent out your property even after your debt is paid off.

This means you have an asset consistently working for you even after it pays down your credit and student loans debts.

This is applying Leverage- you have purchased an asset that consistently generates money for you and you didn’t have to spend a lot to do it.

You spent $10K to get out of default, $40K to finance a property. You still have $50K left to invest in another property, stock, business, or seed through crowd-sourcing to your community.

If you would have paid off the $60K right away, you would only have $40K left, and no assets that are making you money. You would be in a financially worse position.

Much better than just paying down ALL your debt outright.

Right now, you’re thinking- “That’s smooth and all, but no one is about to give me $100K”.

Fair enough.

The point is for you to get busy thinking about how you can LEVERAGE the money you do have in order to improve your future financial position.

Here’s what you can do today:

Purchase some stock– From the privacy of your own home, you can put money in the S&P 500 ETF (purchase thru Vanguard or any online trading platform). Interest is around 7%. That means that every 10.2 years, your money will double. So if you only put $1K in today AND NEVER PUT ANY MORE MONEY IN, in 10 years (on average), that $1K will turn into $2K.

However, if you put $1K in EVERY Year for 10 years consecutively, you will have $14,783. At the end of another 10 years, $43,865.18, if you continue for another 10 years, $101,073.05. This keeps on going.

In a total of 30 years, you will have generated $100K.

Keep in mind that only $30K is money you put in directly- $70K is pure earned compounded interest.

Let me put it another way:

At the end of 30 years…

you would have generated more than $100,000…

for less than $2.80 a day…

That’s using rule #1- Financial LEVERAGE in order to create large sums of money with very few dollars. Your money is working like little soldiers for you now.

Now, maybe some of you are saying- “I ain’t got 30 years to wait.”

First, you don’t need 30 years. Imagine if you could put $10K into the market instead of just $1K.

Or…

Imagine if you began crowd-sourcing to raise money directly for your business today.

Or…

Imagine doing both. Having a long-term strategy of disciplined investment in the stock market and a short-term strategy of starting your own business to generate income.

For people who think that Time is STILL a problem…

I’m sorry, but it’s not really about you.

Never invest in the market just for yourself.

If you have children, in 30 years, they may be able to use $100K to fund real estate, businesses, and invest in stocks.

Invest NOW for THEM.

The wealth gap between Blacks and Whites is staggering. This will likely remain the case.

That does not mean that you are powerless to enhance your financial future. If you understand the #1 financial principle- you can take steps to build Generational Wealth today.

We Black folks are good at doing a lot with a little.

Luckily, the rules of money DEMAND that you learn to do a lot with a little…

Sounds like you already got a leg up. 

 

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