A New Way to Get Small Business Loans From Neighbors

Even before President Barack Obama signed the JOBS Act into law in April 2012, explanations for how crowdfunding would be a boon to Main Street often went something like this: An entrepreneur wants to open a coffee shop. Instead of running up credit-card debt or groveling at the bank, she sells shares in the business to her java-loving neighbors and raises enough to open. The neighbors get caffeinated and are motivated to support the business in which they’ve invested.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.