Want to Help Local Businesses? Consider Crowdfunding

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It’s no secret that local businesses have taken a hit lately. Many businesses described as non-essential during the current pandemic are unable to open their doors at all, while even businesses such as restaurants that have been allowed to remain open in many regions, do so in a limited capacity due to current regulations.

COVID-19 has wrought such havoc upon small businesses that a survey by the National Federation of Independent Business found that one in five small businesses anticipate having to lay off part of their workforce in the next six months. Also, half of small businesses expect they’ll need additional financial support during the next year in order to stay afloat.

So what’s a savvy, altruistic investor to do?

If you feel like championing small businesses and have funds in your Self-Directed IRA to spare, you can use them to invest in businesses of your choosing. The simplest way to invest in a small business is often crowdfunding. Crowdfunding allows you to invest in a business, by way of providing funds, in exchange for receiving shares of equity.

Using crowdfunding platforms such as CrowdStreet or WeFunder can be an easy way to explore investing in pre-established small businesses and start-ups, as well as those that have yet to launch. You’ll want to perform your due diligence on the business you plan to invest in and the platform through which you’ll be making the investment before going through with any transactions.

Want more investment ideas? Check out 90 Things You Can Invest in With a Self-Directed IRA.