SMBX Review : High-Yields For Non-Accredited Investors

SMBX is carving out a niche by serving small and local businesses in sectors like retail and entertainment, similar to what EquityNet does for accredited investors. This innovative marketplace connects individual investors with small businesses in need of funding, offering investment opportunities with up to 11.5% interest. 

SMBX focuses on community impact and supports diverse businesses, including those owned by minorities and underrepresented groups. It’s redefining traditional investment by creating a win-win situation for both investors and local businesses. Continue reading my SMBX review to determine if it is right for you. 

What Is SMBX?

SMBX, established in 2018 in San Francisco, is a trailblazing online platform connecting small businesses with individual investors. It offers a unique opportunity to purchase Small Business Bonds™, allowing investors to lend directly to businesses they support. 

This approach provides businesses with a simpler and more affordable way to raise capital compared to traditional bank loans, without surrendering equity. SMBX creates a community-centric investment environment, emphasizing not just financial returns but also the growth of local economies and businesses.

How Does SMBX Work?

SMBX functions through a detailed process to facilitate investment in small businesses. Initially, SMBX evaluates each business’s financial history, focusing on profitability and risk factors like cash flow and management experience.

Once approved, businesses are listed on SMBX with comprehensive details, including their financial goals and documents. Investors can then choose to invest in bonds from these businesses. Funds are held in escrow until the investment goal is met, and then disbursed to the business.

Investors receive monthly repayments, but they cannot resell or transfer their bonds for a year. This system streamlines funding for small businesses and allows investors to contribute directly to community enterprises, helping to foster local economic growth.

SMBX Features

Here are the beneficial features you can expect from SMBX:

  • Investor Education: Offers comprehensive educational materials for investors.
  • Transparent Terms: Clear and straightforward investment terms.
  • Nationwide Service: Available across the US, catering to various business types.
  • Diverse Opportunities: Invest in a variety of small businesses.
  • Low Entry Point: Minimum investment starts at $10.
  • Regular Income: Monthly interest payments from investments.
  • Community Support: Contribute to local business growth.
  • User-Friendly Interface: Simplifies investment management process.

SMBX Pricing

SMBX offers a straightforward pricing approach. Investors using their bank account for investments enjoy the perk of no service fees. On the flip side, card users incur a 4% fee on transactions. The platform’s revenue comes from the small businesses that borrow through SMBX, charging them a 3.5% financing fee when their loans are funded. This way, investing remains cost-effective for most users.

How Much Money You Can Make On SMBX

The potential earnings from investing in SMBX’s small business bonds vary and can range over 10-11%, though this is subject to various factors and inherent risks. While some have reported the platform has a default rate of less than 1%, it’s crucial to understand that all investments carry the risk of loss.

SMBX is accessible to non-accredited investors, but investment limits set by the SEC apply. These limits depend on an investor’s income or net worth. For those earning or worth less than $107,000, the cap is the greater of $2,200 or 5% of their annual income or net worth. For those above this threshold, the limit increases to 10% of the greater of their annual income or net worth.

SMBX Competitors

There are a few quality companies that have sprouted up in the alternative investment space in the past few years. While SMBX might be the leader in small business investments for non-accredited investors, there are some other alternative asset classes that have yielded impressive returns. Here are a couple in the real estate sector that really stand out:

  • CrowdStreet: CrowdStreet, founded in 2014 in Portland, has facilitated over 732 real estate deals, attracting over $3.9 billion in investments. It caters to accredited investors, offering access to commercial real estate investments without registration or listing fees. CrowdStreet’s platform includes diversified funds, individual deals, and tailored portfolios. Despite its high account minimum of $25,000, it provides a user-friendly experience with educational resources and a thorough vetting process for every project. 
  • EquityMultiple: EquityMultiple is a real estate investment platform that focuses on providing accredited investors with opportunities in commercial real estate. The company stands out for its rigorous vetting process, ensuring only high-quality projects are listed. It offers a variety of investment options, including individual projects, funds, and Opportunity Zones. EquityMultiple’s strength lies in its comprehensive approach to investor education and transparency in investment details. 

Final Thoughts

SMBX offers a refreshing approach to investing by linking individual investors with small, local businesses. With features like diverse investment opportunities, low entry points, and a focus on community support, SMBX stands out for its commitment to both financial returns and local economic growth.

The platform facilitates a straightforward investment process, ensuring transparency and ease for investors. With potential earnings ranging over 10-11% and a focus on businesses often overlooked by traditional funding channels, SMBX creates an accessible investment environment with a strong community impact.

To learn more about how SMBX works and its potential benefits for investors, Click Here