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Crowdfunding Bill Likely to Become Law Very Soon
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Crowdfunding Bill Likely to Become Law Very Soon

Crowdfunding Bill Likely to Become Law Very Soon

Peter Renton·
Regulation
·Mar. 2, 2012·1 min read

Last year the U.S. House passed a crowdfunding bill (H.R. 2930 – Entrepreneur Access to Capital Act) but it has never made it to a vote in the Senate. That looks set to change.

Yesterday House Majority Leader Eric Cantor announced that he would bring up and pass a jobs bill in the house next week. According to this article in The Hill it will also garner support from the Democrats. The new jobs bill is actually six bills one of which is H.R. 2930. As Forbes reported earlier in the week Senate Majority leader Harry Reid now supports H.R. 2930. Many of the other bills are also popular with both sides so it looks like we may well have a new crowdfunding law possibly as soon as later this month.

To recap, H.R. 2930 has three main components that will effect how small businesses are able to raise capital:

  • A $10,000 limit per investor (or 10 percent of annual income, whichever is less).
  • A cap on the amount a company can raise of $1 million per offering (and up to $2 million if audited financial statements are provided).
  • No limit on the number of accredited or unaccredited investors.
But what is most interesting to followers of p2p lending is that this bill creates a legal precedent for a national securities law that overrides state law – something that both Prosper and Lending Club would dearly love to see in a p2p lending bill. If you allow individuals to invest small sums of money in businesses (a highly risky endeavor) it stands to reason that a similar investment in a creditworthy individual should also be allowed.
There is still a long way to go but I think this is good news for the p2p lending industry.
  • Peter Renton
    Peter Renton

    Peter Renton cofounded Fintech Nexus as the world’s largest digital media company focused on fintech before it was acquired by Command. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.

    View all posts
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