Representative Patrick McHenry distributed multiple legislative proposals today designed to mitigate the impact of the Coronavirus pandemic. While the inevitable outcome is unknown, what is clear is that the economy will take a hit – most likely impacting small businesses disproportionately.
McHenry, the Ranking Member on the House Financial Services Committee, has submitted a bill that may be of interest to funding portals – entities that were created under the JOBS Act of 2012 to host issuers using the Reg CF exemption.
Under the bill, entitled “Relief for Small Businesses Through Micro-Offerings Act of 2020,” issuers may raise up to $250,000 on funding portals, or broker-dealers.
According to Representative McHenry:
“… this bill would create a new micro-offerings exemption to allow broader access to capital for entrepreneurs and small businesses. This provides necessary support to concerned job creators whose workforce or product may be negatively impacted by COVID-19 and any shortage in traditional bank lending. Micro-lending has a demonstrated track record for providing much-needed capital to entrepreneurs—often women and minorities—in underbanked communities, helping them start and grow their businesses.”
It remains unclear if this legislation will have bipartisan support – necessary to make it out of committee. The legislation also appears to be in need of some additional details but the bill partly aligns with previous efforts to create a micro-offering exemption.
Relief for Small Businesses Through Micro-Offerings Act of 2020