It's no secret that banks have been more wary of lending to small businesses inthe past few years. A 2010 survey by USA Today listing financing resources for companies placed bank loans at 43 percent in July 2010, down from 53 percent the prior year. And small business lending, which peaked at more than $700 billion in 2008, is closer to $600 billion now, according to data from the Federal Deposit Insurance Corp. This is despite a 2011 commitment made by 13 of the nation's largest banks to increase small-business lending by $20 billion over the following three years.
Then, in April 2012, President Obama signed the Jumpstart Our Business Startups (JOBS) Act into law, legalizing equity and debt-based crowdfund investing (aka crowdfunding), aimed at helping small businesses raise the capital they need to launch or expand their operations. Crowdfunding will enable businesses to raise capital online from a large base of individual investors through SEC-approved portals.