COMMUNITY ACTION TO HELP CREATE BUSINESSES AND JOBS
Common Collateral Fund has been created to assist small businesses meet the collateral requirement that has always prevented most disadvantaged small start-up businesses from obtaining bank loans. Many small business start-ups have failed to take off due to lack of capital and when the promoters expect that they can seek bank loans, they meet with the biggest obstacle which is collateral to guarantee that the bank would be able to recover their money in case the business were to fail. This fund has been created as a means to open up
business ownership opportunities to entrepreneurs who have not inherited wealth, or who have not been able to save living paycheck-to-paycheck, or been lucky enough to have a relative or friend who can guarantee a loan for their start-up capital needs.
Many entrepreneurs have ended up not implementing their business ideas, not because their business wasn't feasible, but due to lack of start-up capital. In several cases, these entrepreneurs have also not been able to secure the SBA guarantee like would be expected, because these guarantees are not easily accessible as often portrayed. When you get into a bank and try to get a loan for your start-up, then you get to realize that it’s not as easy as presented or promised.
Bankers give you the run-around, and at the end it boils down to “What do you have as collateral?” So finally who is able to get a loan to start a business if you did not inherit wealth, or if you could not save from your meager paycheck, or if you don’t have a relative or friend who can give you the money or collateral to secure a loan from the bank?
Collateral Fund is the answer to this dilemma that many continue to struggle with and end up not pursuing
their business goals. This will help many minority or disadvantaged entrepreneurs with feasible business plans, break through that barrier to be able to make their contribution to the job creation process within their
communities.
Several studies have revealed that disparity in business capital ownership is a root cause of the growing
wealth gap between the 1 and 99% of the population, and if a system could be established to expand capital ownership to include the have-nots, all incomes including wages and profits could be more widely distributed to
help prevent economic downturns. Ideas of Worker Cooperative businesses and Employee Stock Ownership Plan, ESOP Companies have been advanced as some mechanisms whereby bank loans can be extended to businesses without the strict need for conventional collateral that largely excludes the have-nots and workers from business capital ownership. Capital Sharing is a concept that has been developed by this group to incorporate the ideas of Worker-ownership or Employee Stock Ownership.
The ideas of the Collateral Fund and "CAPITAL SHARING" are being integrated to facilitate the process of creating partly or wholly Workers-owned Businesses that will help create thousands of jobs and absorb
the un- or underemployed in communities. This approach is intended to reduce the risk of giving capital assistance to start-up businesses that don’t have any collateral or guarantee. The sharing or joint-ownership
aspect improves the chances for organizational and managerial efficiencies that will guarantee successful business implementation and outcomes.
The Collateral Fund will operate as a Mutual Guarantee Fund (MGF) and will help to UNFREEZE much needed bank loans to start-up and existing businesses that promote worker ownership-sharing and create new Jobs. This group firmly believes that communities could be motivated to adopt this approach, and
with little help from government, should be able to create thousands of jobs for the citizens. Banks are currently sitting on Trillions of dollars, reluctant to lend to small businesses without hard collateral and there needs to be a means of getting this money out into the economy in ways that will promote sustainable and balanced growth. Small businesses are known to be the Engines of economic growth and yet many are held back from even
starting due to lack of collateral to obtain bank loans. The MGF will help to unravel this impediment.
THE CASE FOR CAPITAL SHARING
Capital Sharing or expanded capital ownership has been a largely missing component of contemporary
economic discussions, debates and analyses. Proponents have nonetheless concluded that broadly-shared capital would be necessary for long-term economic sustainability by facilitating business participation for those
who don’t have the capacity to acquire Capital to start a business on their own. The contrary would be deepening and or recurring recessions, due to weak aggregate demand amidst expanding income disparities and
concentrated ownership. The combined concepts of shared-ownership and mutual guarantee have been widely used in other countries such as China, Germany and Italy to build more recession-proof economies and this group believes it’s time for other communities to wake up to this model of economic building that will protect people’s jobs and expand incomes more broadly without much reliance on government or political parties. The justification for Capital Sharing and Common Collateral is overwhelming in achieving more stable economic growth.
Technology advance is rapidly displacing workers. Customer Service and other jobs are becoming more highly automated. Even Bank Teller positions are being replaced by Online Banking and mobile Apps. When most jobs will get replaced by machines, where will the unemployed get money from to pay for goods and services? It's TIME to adopt a system that expands business Capital ownership to include ordinary workers in the profit-sharing stream, so that when jobs are lost to machines, incomes will continue to be gained through more profit-sharing from shared-capital ownership. This is neither Socialism nor pure Capitalism, but it’s Capitalism with a human face, and Communities taking control of their economic empowerment.
The Mutual Guarantee Fund, which will be privately managed, will be raised from members’ contributions, charitable donations, development finance and social investment capital. This program will create partnerships with Small Business Technical assistance agencies, Universities, unemployment agencies and Multinational Corporations that would like to bring jobs back to America through some of the small businesses supported, adopting them as "Local Subsidiaries".
We see the Capital Sharing concept as the Next Big Idea and are inviting potential partners to join us in developing this idea further as a real strategy for getting the US and possibly global economy moving forward
again. If you are a small business owner needing help to move forward, or if you just believe in the difference this program would make, please join us and make your own contribution and then invite others to sign up and
contribute also.
ACTION PLAN
Our ambitious goal is to raise $100 Million in the first three years for the Fund. This will help us start/fund at least 500 small businesses and create at least 50,000 new jobs, in THREE YEARS! With more support, this goal could explode to shocking levels and Unemployment could become history!
* Representatives are needed to start the program in each State. This will help to accelerate the business and job creation process. Contact us or Register here... through our website.
Grand Launching Event: TBA. Check here for details. Please suggest the names of someone you would like to see at this Grand Event. We are reserving 10 Important seats for those we're going to honor as the Great Transformers to join us and make this a reality.
If you can, send this information to them with the suggestion you are nominating them as one of the Great Transformers of our Time! The Great Transformers will have to be the first Key Sponsors of the program. Click Sponsors to see conditions for sponsorship.
Together we are about to create a New System of opportunities for the Many, not just the Few.
Thank You.
The Executive Committee,
Worcester, Massachusetts.
(508) 365-5503
[email protected]
October 2013
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