Investing in local businesses as a missing piece of community development: Takoma Notes local financing as an answer
When the Popularise and Fundrise real estate crowdfunding platforms were created, I argued that while it is great to offer local residents the ability to make recommendations on property development -- "the kinds of businesses you want" -- and the option to invest in local properties, the more significant need was financing for retail and service business startups.
-- Retail: what you want vs. what you can build vs. what you can create
The issue is how to make what you want happen.
Apparently, the Old Takoma Business Association in Takoma Park, Maryland, which runs the Main Street Takoma commercial district revitalization program that serves the commercial areas of Takoma in both Maryland and DC, has created such a vehicle, according to this press release:
Old Takoma Business Association Launches New Takoma Notes Local Investing Program - Shop Local, Eat Local now Invest Local Too!
The community known for its strong support of local businesses, will be able to invest in its businesses through a new local investing program, called Takoma Notes, created by the Old Takoma Business Association (OTBA). Through the program, local investors will be offered the opportunity to invest in local businesses, new and established, and watch their money in action in the community.
Barter, sharing, local currencies: formalizing the informal economy as a response to economic downturn."
Working for over a year with a group of dedicated volunteers and representatives from Colombo Bank, the Old Takoma Business Association created a program which identifies local businesses that would benefit from additional capital and develops specific loan packages to meet their needs.
Through the program, the OTBA vets the businesses then raises the money to make the loan by issuing Takoma Notes to local investors. When the OTBA raises the necessary amount within the established time period, it then lends the proceeds to the specified Takoma business. The business will pay interest and principal to OTBA which will in turn pass those payments to the Takoma Note investors. This program is offered to all Maryland and Washington, DC residents that want to support local businesses and see
their money contribute to the vibrancy of the community.
The first recipient selected for the program is one of Takoma’s newer businesses, MAD Fitness, a fitness studio in Takoma Park, MD which offers functional fitness classes and personal training. The Old Takoma Business Association will be offering $10,000 in Takoma Notes, available in increments of $100 and higher to MD and DC residents. The MAD Fitness series of Takoma Notes has a stated interest rate of 3%.
Info about how to invest in the MAD Fitness series of Takoma Notes coming soon! Open to all MD and DC residents. Sign up here to be notified of the MAD Fitness series and other future series.
Labels: building a local economy, business incubators, business loans, business models and operations, commercial district revitalization, community building, participatory democracy and empowered participation