"Alabama Senate moves to help small businesses raise startup money through crowd funding:
MONTGOMERY (AP) — The Alabama Senate is trying to give people a new way to raise money to start small businesses.
Enlarge Arthur Orr
FILE -- In this photo taken Feb. 4, 2013, State Sen. Arthur Orr, R-Decatur, talks with reporters in Montgomery, Ala. Alabamians trying to start small businesses in a tough credit market may soon have a new method that will allow them to raise small amounts of capital from many Alabama investors. Known as “crowd funding,” the process has been used for years to generate money for political campaigns, artistic projects and charities. It will become a legal way to raise capital for small businesses in Alabama if the Legislature approves a bill in the next session starting Jan. 14. Orr, the bill's sponsor, said the Alabama Securities Commission asked him to introduce the bill because small business people need a different way to raise money. “It's difficult for start-ups to get bank loans and other traditional financing,” he said. (AP Photo/Phillip Rawls, file)
APThe Senate voted 31-0 Thursday for a "crowd funding" bill sponsored by Republican Sen. Arthur Orr of Decatur.
The legislation is backed by the Alabama Securities Commission. It would allow someone trying to start a small business in Alabama to use social media and advertising to find small investors who live in the state. It is limited to raising $1 million, and it is restricted to Alabama businesses and investors because of federal regulations.
The proposed legislation is an option for people trying to start small businesses in a tough credit market, Orr said.
His bill now goes to the House for consideration. House Speaker Mike Hubbard, R-Auburn, said Thursday he favors the bill because Alabama needs innovative ways to give small businesses access to capital. But he said he has not had a chance to gauge support in the House."
This is one of two bills I know of that could help startups. The other has been pushed along for a couple of years and would provide an investment tax credit for investments in small/startup enterprises.
I, for one, hope both can pass this year.