Regarding the Jan. 6 news article “ McCrory wants incentives bill”: Commerce Secretary John Skvarla spoke about passing legislation to allow small entrepreneurs in North Carolina to participate in equity-based crowdfunding. He said this would help alleviate the problem that many small businesses have accessing capital to start up or expand.
While crowdfunding is an important tool for many businesses, it will not meet the needs of many small-business owners who continue to face barriers to accessing capital. Most “Main Street” businesses that fuel local economies are not going to benefit from equity-based crowdfunding. They are typically not able to offer equity to investors, nor are many of them tied into networks of potential investors.
Equity-based financing like crowdfunding and venture capital are not the right fit for them. Yet these businesses are also vital to our economy.
North Carolina should seek a multi-level approach to expanding access to capital. Allowing for more crowdfunding will certainly boost some small entrepreneurs, but the state should also create a revolving loan fund to allow banks and alternative lenders to reach entrepreneurs outside the financial mainstream.
With this approach, all small businesses can have a better chance to grow and improve our state’s economy.
Lenwood V. Long Sr.
President/CEO, The Support Center