Small businesses and startups in the United States are having an increasingly difficult time raising the money they need to expand their businesses.  During the recent economic downturn funding has become increasingly difficult to find. Banks have stopped lending, credit card companies are tightening up their lending requirements, and there is substantially less Venture Capital and Private Equity available.
The money is out there but there but it is simply not flowing from the people who have it to the people that need it. Â Making this problem worse is the stringent investment regulations that the SEC imposes on small businesses. Entrepreneurs and small businesses are starting to look outside the US for the capital they need to expand their businesses.
A recent article in the WSJ highlighted just such a situation. Â A small manufacturing business in Riverside California, has been desperately searching for capital so it can hire more workers and expand its operations. Â “During the downturn, we went on the hunt for capital, but after 44 presentations we came up short,” says Mr. Williams, 56 years old.
Mr. Williams was unable to raise the needed money in the US so he was forced to sell part of his business to the Chinese. “Private-sector Chinese businesses and investors put nearly $5 billion into U.S. firms of all sizes last year, more than double the amount in 2009, according to the Rhodium Group, a New York research firm.”
Because of the overly strict SEC regulations on investment, we are seeing our American companies being forced to look abroad for needed capital. If we don’t ease the current investment regulations to allow Americans to invest in American companies we are going to continue to see our businesses being sold to foreign companies.
