Community Sourced Capital (CSC) helps small businesses and local economies thrive by helping businesses raise $5000 to $50,000 in zero interest loans directly from their communities. CSC is a U.S. based crowd-sourced zero-interest peer-to-peer lending platform. Real value is created through these loans; measured in jobs, the $1.5 million dollars deployed by on the platform has contributed to the creation of over 100 new jobs.
According to the Federal Reserve, more than three quarters of small businesses do not have access to investment capital. Community Sourced Capital alleviates this problem by giving people a new way to invest in local businesses.
How does it work?
When a business has a project that needs funding, they post the initiative on the CSC platform. Then they reach out to their family, friends, customers and other community members, asking them to become Squareholders. A single Square represents $50. It’s a very simple loan - $50 in and $50 out. No interest is involved - but there is much generosity and love!
Community Sourced Capital then puts these Squares together into a larger loan. The business repays the loan over one to three years, and as the payments are made, the money is distributed back amongst the Squareholders. Squareholders can withdraw these funds, or roll their squares into another loan for another business.
Jessika and Jared, Starvation Alley farm owners
CSC in action
Starvation Alley is a Cranberry farm located in Long Beach, a small coastal town of 1300 people. Jessika and Jared (pictured above) approached CSC needing to buy a juicer for their berries. They reached out to their community on the CSC platform and 112 people came together to provide them a $12,000 loan. The juicer has since transformed their business. Now they buy berries from other farmers and the whole community benefits.
News of their success quickly spread in the community, and the Long Beach community has now provided $100,000 in capital through six loans to local businesses. One Long Beach squareholder wrote in to share her enthusiasm over being able to invest her money for the third time. With just $250 she has created $750 in impact in her community in less than three years!
CSC charges businesses flat fees for services provided. Businesses pay $250 to use the platform to run a funding campaign. After the loan is secured, they pay $50 a month for CSC to handle the repayments and communications to their Squareholders.
Community Sourced Capital connects people with the businesses they know and love to create positive financial relationships. And it works – over 90% of the businesses that run CSC campaigns are successful in raising the funds they need from their community. CSC’s unique combination of generosity, reciprocity, and responsibility is attractive and effective.
Community Sourced Capital was pleased to participate in the Ethical Finance and Innovation Challenge and Awards because we share the belief with EFICA that a morally ethical financial system is an imperative. The universal truths and core human values that connect us all must be reflected in finance!
Community Sourced Capital seeks to create a world where capital flows toward real value; a world where businesses are anchored in service to communities; a world where everyone can participate in the financial system.