Small business financing is one of the greatest hurdles any entrepreneur must face.
In 2015, we discussed a number of ways that entrepreneurs can raise the capital needed to get their companies off the ground and help them grow. We also highlighted several new laws, such as the Securities and Exchange Commission’s new equity crowdfunding rules, that is intended to benefit small business financing. In case you missed any of the posts, below is a brief recap:
SEC Crowdfunding Rules On October 30, 2015, the Securities and Exchange Commission (SEC) adopted final rules to implement equity crowdfunding under Title III of the Jumpstart Our Business Startups Act (JOBS Act). The much-anticipated rules are expected to be a game changer for startups and small businesses because it will allow them to raise money through smaller investments from a large number of people.
State-level crowdfunding While awaiting the SEC rules, more than 20 states legalized some form of equity crowdfunding at the local level. Most regulations allow entrepreneurs to solicit financing from investors who reside in the same state, subject to certain caps. Now that it has finalized its crowdfunding regulations, the SEC also proposed new rules intended to help facilitate intrastate and regional securities offerings.
Friends and Family When founders tap their own resources, friends and family can be a welcome source of capital for new ventures having difficulty securing loans or venture capital funds. Startups can often raise $50,000 to $500,000 and more through this type of financing. However, friends and family financing is not without its pitfalls, including the failure to formalize the arrangement.
Online Lending Online lending is set to outpace more traditional financing methods. In 2015, 80 percent of small-business owners went online first to search for a loan, according to the latest statistics. While the Internet can help connect companies with lenders, as with more traditional loans, it is still imperative for small businesses to do their research.
Regulation A+ Regulation A+, which took effect on June 29, 2015, is intended to provide small businesses with greater access to capital by expanding a little used exemption to SEC registration. Under the new regulations, businesses will be able to offer and sell up to $50 million of securities in a 12-month period, so long as they meet certain eligibility, disclosure and reporting requirements.
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future
For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
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