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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: May 10, 2013

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Small businesses in New York can now take advantage of crowdfunded business loans.

By offering commercial loans to local businesses, individual lenders will be able to support enterprises in their community; perhaps the very same stores and restaurants they frequent.

Now, individual lenders can go to Funding Community, a localized crowdfunder that offers more than just financing to local businesses in the state of New York.

Alex Binkley, CEO of Funding Community, told loans.org that Funding Community was started when he met the company’s CTO Aryeh Goldsmith. The two agreed that they needed to work together in order to inject capital into local businesses.

“I felt there was a lack of capital to small businesses,” said Binkley. “There had to be a better way for them to find capital for individuals to support businesses in their community to get involved.”

The solution was “localvesting.”

Brinkley said “localvesting” — the act of investing in your local community — is a growing movement where individuals shape their neighborhoods.

“It’s this idea of individuals getting out there and supporting businesses in their community so they can define the community they want to live in,” said Binkley.

Unlike banks and traditional lenders, Funding Community claims that it doesn’t reject borrowers who simply “can’t check one particular box.”

“We’re trying to open up that credit market,” said Binkley. “Local businesses can expand their business by using our platform. It’s not just a loan, it’s an opportunity.”

Funding Community works by having individuals loan money to support a business loan. These funds are then used by Funding Community to give a business loan to a borrower. Every month the borrower pays down the principal and repays each lender with interest.

On top of that, Funding Community asks that business loan borrowers offer rewards to lenders in the form of discounts at their stores and businesses. However, Funding Community is set apart from other crowdfunders by more than just rewards.

“We turn lenders into customers,” said Binkley. “There are other companies out there who do crowdfunding but right now it is limited to high net worth individuals. On the marketing aspect one of our co-founders has a background in social media and we’re involved in helping borrowers promote.”

While still growing in New York state, Funding Community plans to expand outward across the country in 2013. It is currently encouraging businesses outside of New York to apply for business loans.

(Interview with Mr. Binkley conducted by Isaac Juarez)