Alternatives From EIDL or PPP?
Many business owners have been rejected for the EIDL or PPP for their business during this pandemic crisis. So what do you do when you have no funds secured for your business? You would most likely look for alternative options on how to fund your business to preserver.
One of those alternatives is crowdfunding! So what is crowdfunding exactly? It is the practice of funding a project or venture by raising small funds from a large collective (usually from people online). Originally, a lot of crowdfunding was used for funding innovative ideas or products that were normally seen as too "unorthodox", since many companies would rather play it safe than experiment with something new and different. Often using sites like Indiegogo or Kickstarter to pitch their proposal to everyone and get it funded. The products could range from a Pocket Size Coffee Maker, a USB sized SSD (Solid State Drive), board games, and more.
Why crowdfunding now? Is this relevant to your business funding? There a couple of things the SEC (Stock Exchange Commission) has changed since the pandemic crisis of the coronavirus (COVID-19) started in order to allow issuers to get access to capital and liquidity quicker than they ordinarily would. Traditionally, for any transaction that is over $107,000 in size, the issuer would have to obtain reviewed financial statements from an independent CPA as part of the documentation in order to do a crowdfunding transaction. That has recently changed as the SEC raised the limit, so now anyone without the independent CPA reviewed financials can do a crowdfunding transaction up to $250,000. They also reduced the minimum time that the transaction has to be open, so you no longer have to wait for 21+ days for the transaction to be closed. The waiting period has been effectively reduced to within 48 hours or immediately.
Please make sure to watch our video where we interview Jovan Vojvodic, the Managing Director from NextSeed. There he explains in full detail on crowdfunding and the rules of crowdfunding. Share our video and follow us on our social media channels for updates on the latest news on taxes, accounting, and finance!
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