A crowdfunding bill to promote raising capital for small businesses has passed the Alabama legislature and now awaits Gov. Robert Bentley’s signature to become law.

Senate Bill 44, which passed the Senate in January and the House of Representatives on Tuesday, will provide an opportunity for Alabama entrepreneurs to raise up to $1,000,000 from investors in the state in a streamlined and cost effective process.

“Small businesses and startup ventures will be able to advertise and raise capital from Alabama ‘main street’ investors and may raise such capital with or without a broker,” according to a press release from the Alabama Securities Commission. “If the business uses a securities broker, the broker must be properly registered with the Alabama Securities Commission.”

When the bill becomes law, the commission said it plans to partner with different entities in Alabama to provide workshops for people interested in using the crowdfunding mechanism to raise capital.

“This crowdfunding mechanism will provide a significant opportunity for Alabama entrepreneurs who wish to raise capital to start small businesses, as more traditional financing in the current economic climate have been limited,” said ASC Director Joseph Borg. “Senate Bill 44 will allow small businesses to pursue an economical way to raise funds through localized securities offerings. While investment in startup businesses has risk, the potential rewards in promoting new businesses and job formation in our local communities are invaluable.”

April 2, 2014

Antrenise Cole | Reporter- Birmingham Business Journal

Antrenise Cole covers banking, finance, small business lending, venture capital, accounting and law for the Birmingham Business Journal