This is a system where people lend money to funds which go exclusively to local businesses.
The key to the process is that the lenders, also known as investors, would accept a rate of return that is not very competitive.
The local business borrowers would then be able to get capitol at a better than premium rate. With the money, businesses could build a better product, expand, or withstand lean times.
The lenders would benefit from this because the neighborhood that they live in will become infused with more money and the value of their homes will rise. There are also psychological gains in which members of a community feel as if they have a stake in the community's success.
One obstacle in this plan is the risk for the lender where the borrower does not repay.
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