It’s no mystery as to what the health of the small business loan environment is. The diagnosis is not good. Indeed loan growth in core small businesses has been lackluster and anytime an index or data point is released showing a positive upswing in small business loans the amounts are generally in the $1 million and up range, atypical of the average small business. Even the loans for more regular amounts are below historical standards as found in the Small Business Administration’s report that banks only held $607 billion in small business loans of $1 million or less. That’s $100 billion less than 2008. Further the Treasury’s Small Business Lending Fund (SBLF) is nowhere near as productive as it could be thanks to community failing to connect the funds with where they need to go.

If the money is not going to come from banks then where? Crowdfunding looks to be the next logical place to turn. Indeed, the concept involves pooling funds from various venture capitalists and other wealthy investors who believe in what a company is trying to do and the process may have been streamlined thanks to the JOBS Act. Unlike normal loans though, crowdfunding investors typically want something more that interest on their loan. Generally this involves handing over some type of partial ownership or profit sharing scheme. That can seem steep but if you can agree to it you could be opening up your business to a wash of investment capital. Euromoney continues, “There are some 20 crowdfunding platforms globally that specialize in loans. It is estimated that by the end of this year they will have lent almost $1.1 billion. Candace Klein founded SoMoLend, a crowdfunding platform for small businesses, in 2011. Klein, a corporate lawyer and former mezzanine debt analyst, worked with banks and start-up companies, many owned by women. She began to research crowdfunders and micro-lenders after witnessing her legal clients being adversely affected by the credit crisis in 2008 and 2009. In 2010, she launched Bad Girl Ventures, which provides loans of up to $25,000 to women, with the requirement that the business owners have to take nine weeks of training in finance and business with Klein’s firm first. "In the first year, we had over 1,000 women apply," she says. "We have considered 560 of those applications and, along with partners, we have funded 38 companies with $2.2 million. But the question then and now is – what can we do for the rest?..."