Small Business Bonds: SMBX Raises $2.5 Million Seed Round

SMBX,  an online investment platform issuing securities under Reg CF, has raised $2.5 million in seed funding in a round led by Better Ventures with participation from Impact America Fund (IAF), Unpopular Ventures and others, according to a note from the company. SMBX is a crowdfunding platform that issues small business bonds providing access to capital to smaller firms.

The FINRA regulated marketplace issues bonds that expect to return 4% to 9% annually.

Along with the seed round announcement, SMBX states that two new bond offerings have just been listed on the platform.

Bhavish Balhotra, CTO of SMBX, says SMBX is ushering in a new wave of Fintech.

Jackie Chan, COO of SMBX states:

“We’re lowering the barriers to complex financial tools. Let’s use these innovations to empower communities to thrive. We are especially excited to open new pathways to capital for small business owners affected by COVID-19 and give everyday people the ability to invest in the small businesses in their community.”

SMBX allows individuals to invest for as little as $10 and earn up to 9% return, via monthly payments of principal and interest. SMBX says that for businesses it offers competitive interest rates of between 4-9%, doesn’t require a personal guarantee. SMBX adds that it does not collect any fees until the company successfully closes its bond offering, at which point it applies a 3.5% service fee on the total fundraised amount.

Wes Selke, MD at Better Ventures, says the process of a business issuing bonds via SMBX “ignites a virtuous reinforcement cycle that benefits both the business and the community.”

“We’re proud to back a company that’s mission focuses on building a more equitable economy.”

Kesha Cash and Kaiton Williams, investors at IAF, believes that SMBX, a platform that offers community-oriented financial products, is extremely important – especially for businesses run by people of color:

“Despite their considerable and growing contribution to the American economy, these businesses haven’t been prioritized by large financial institutions and their success is critical for national economic recovery.”

The three new issuers listed on SMBX include:

  • The Cookie Department, a Portland, Ore.-based online business selling KETO cookies, is raising $25k to grow its online sales and launch its new flavor, Champion Chip.
  • Uji Time, a Bay Area-based Japanese inspired dessert shop, is raising $100k to introduce a new line of hard ice cream that’s easier to deliver to their community across the Bay Area.

 

 


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