Entrepreneur Access to Capital Act

With the new year, new budgets, and strategic growth planning for your business, you may be finding that funding for your operations and growth expectations are hard to find.  Since bank loans are tougher to obtain and some of your other sources of funding are extra tight, you may want to consider an alternative method of obtaining capital by issuing your own securities by a method called crowdfunding.  There may be some help coming from Congress which will make this avenue of securing adequate capital to meet your company's needs less complex and easier.
 
Back on September 14, 2011, HR 2930 was introduced in the House by Representative Patrick T. McHenry and (5) sponsors (Representatives Kevin Brady of Texas; Robert J. Dold of Illinois; Sean P. Duffy of WI; Jean Schmidt of OH; and David Schweikert of AZ).  The proposed legislation would allow a company to raise funding by issuing securities with a total of $2 million or less with audited financial statements with individual investments by investors limited to $10,000 or $10% (of the investor's annual income) in the pooled securities.
 
Hearings were held on December 1, 2011 by the Committee on Banking, Housing, and Urban Affairs of the Sub-Committee on Financial Services chaired by Representative Spencer Bachus of Alabama.  The Bill was reported out favorably by the Sub-Committee with (5) amendments and passed by the House and placed on the Senate Calendar for Action.  It is anticipated that the Senate Committee will take up the proposed legislation when Congress reconvenes for 2012.
 
Attached is Summary of Action on H.R. 2930, a copy of the Report by Representative Bachus of the Committee of  House Financial Services, and a copy of the Bill that was placed on the Senate Calendar (with amendments).  You may want to follow the action of the Senate Committee on H.R. 2930 for a potential expanded source of funding capital in 2012.

Don Gowen
Executive Director
Alabama Consumer Finance Association