As inflation surges and equity markets continue to stumble, investors everywhere are looking for ways to backstop their portfolios with stable investments.
But many investors aren’t only looking for meaningful returns in tumultuous economic times. They’re seeking ways to ensure their investments are bringing more meaning to their everyday lives, especially close to home where they can see the impact of their money on their communities.
During the early days of the pandemic, as neighborhood businesses struggled to remain open, people looked for ways to support their favorite businesses in their communities. Many increased purchases, bought gift certificates, and even joined Go Fund Me campaigns to help them meet payroll and survive. Yet, DC still lost over 2,300 businesses from March 2020 to March 2022.
But now, through a new initiative called the DC Rebuild Bond Program, residents are supporting small businesses by investing in them directly, while earning up to 9% interest on their investments.* They’re not just shopping local, but investing local–keeping wealth creation in their communities, all while building their investment portfolios.
The DC Rebuild Bond Program is a partnership between SMBX, the financial marketplace that connects qualified small business owners with everyday investors, and DC Mayor Muriel Bowser and the Deputy Mayor’s Office of Planning and Economic Development (DMPED). The program’s goal is to drive $5 million in investment into the District’s small businesses by giving residents the opportunity to invest in them. All DC businesses are eligible, with a special emphasis on businesses in Wards 5, 7, and 8–neighborhoods that have historically experienced economic discrimination.
“This is why we partnered with SMBX to harness the support of DC residents of small businesses throughout the pandemic to benefit the District’s entrepreneurs over the long term,” said John Falcicchio, Deputy Mayor for Planning and Economic Development. “It is so important for small businesses to have access to funding, specifically entrepreneurs of color, and SMBX provides a viable option to convert customers to investors.”
Popular DC hotspot Maketto raised over $130,000 in investments to build a new outdoor dining space for customers. “Doing a bond raise through SMBX has been rewarding on so many levels. Not only did we achieve our raise goal, but we have attracted new guests while strengthening our already strong sense of community from our long-time regulars and guests,” said Erik Bruner-Yang, Maketto’s Founder and Head Chef.
Nearly 200 investors are now receiving monthly principal and interest payments from Maketto’s Small Business Bonds. They’re truly invested in the success of the restaurant where they can see their money working in the community. An investor who purchased $1,000 of Maketto’s Bonds at 7.5% interest over 60 months, will earn $1,202.28 over the term of the investment.*
Through the DC Rebuild Bond Program, small businesses issue an innovative debt product called a Small Business Bond™, which can be purchased in $10 increments on the SMBX marketplace. In 2022, Small Business Bonds have consistently yielded an average return rate of 7.4% to 8% interest*–a return that is rivaling similar fixed rate investments during the current market volatility.
The Small Business Bonds are designed to amortize over time, so as more of the principal is paid back, the interest rate on the Bond is only applied to the remaining principal. Monthly payments are even throughout the life of the Bond, so each month an investor can expect the same payout amount, while the small business owner has a predictable monthly payment to manage cash flow.
Twelve DC businesses have already raised over $1.1 million from investors since the DC Rebuild Bond Program was launched in September 2021, including other well-known DC restaurants El Tamarindo, Lucky Buns, and Sticky Fingers Sweets and Eats. More small businesses have joined the program including local restaurants Arepa Zone and Zeleno, as well as art and events venue Tool Box.
SMBX CEO and co-founder Ben Lozano praised Mayor Muriel Bowser, Deputy Mayor John Falchicchio, and the DC Rebuild Bond program. “We’re partnering to help DC entrepreneurs and investors advance their goals and aspirations in a community-minded, community-led fashion,” said Lozano. “By turning neighborhood fans into active investors in their favorite businesses, we’re creating a financial system that benefits everyone in the community and helps keep the cycle of wealth and prosperity in the District.”
For more information on how you can start investing in DC small businesses, support your local community, and add Small Business Bonds to your investment portfolio, click here or go to www.thesmbx.com.
