Allegiancy Takes On Today’s Community Banker - Crowdfunding - In Latest Blog Post

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Part of what’s exciting about the crowdfunding element of the JOBS Act, Allegiancy published, is that it can make that difference for small businesses.

Crowdfunding – what’s recently become the media’s darling story when they write about the Jumpstart our Business Startups (JOBS) Act – took the lead in Allegiancy's latest Blog post, where CEO Steve Sadler wrote that it "makes me think about a story my father-in-law told me."

Allegiancy is a Richmond, Va.-based commercial real estate asset management firm.

"He was an entrepreneur," Sadler wrote about his father-in-law. "Through the GI Bill, he attended medical school and became a dentist, and then moved to Eastern Maryland to open a practice. He had no money. No operating capital. Just a license to practice dentistry and the drive to make a difference in his community."

A local banker took a liking to Sadler's father-in-law and told him that when he was ready to open his practice, to come see him.

"That banker ended up loaning my father-in-law the money he needed to buy furniture, X-ray machines and equipment, and to start the business," Sadler wrote. "It turned into a successful dental practice, in part because one banker believed, and understood that my father-in-law simply needed capital to get started. And the banker provided that capital."

Years later, Sadler's father-in-law ran into that banker and by then better understood far more about what it took for banks to lend small businesses money.

"He asked the banker how in the world he had managed to get his loan – a loan to a dentist with no money or business history – approved by the bank’s leadership," Sadler wrote. "Turns out, the banker never got it approved. 'I approved it myself,' he told my father-in-law. 'I knew this town needed another dentist.'"

That loan application sat in the banker’s desk drawer. That banker believed in a business, took a risk, and it paid off.

Part of what’s exciting about the crowdfunding element of the JOBS Act, Sadler said, is that it can make that difference for small businesses.

Crowdfunding has the potential to replace the old-school, character-based lender. And it is abundantly clear that the traditional lenders are gone, replaced by computer models that cannot appreciate nuance.

"It is very unlikely the new dentist could get a loan today, because even former Federal Reserve Chairman Ben Bernanke could not get his mortgage loan refinanced recently," Sadler wrote. "Crowdfunding lets the community decide if your widget or your business on Main Street is worth investing in. They don’t have to check a box, or run your credit score, or turn you away if you didn’t earn at least $2 million in revenue last year. They can invest in you based on the fact that they believe in you."

And it’s that return to character-based lending "that will help bring back our economy and create the very jobs and healthy small and mid-sized businesses this country needs."

Sadler's company, Allegiancy, is on the cutting edge of another benefit of the Jumpstart Our Business Startups (JOBS) Act. The U.S. Securities and Exchange Commission (SEC) is expected to announce the new rules for Regulation A+ (Reg A+) shortly and Allegiancy plans for his company to be one of the first to become an active participant in the new Reg A+ marketplace, which will allow businesses to raise up to $50 million in private equity vs. the $5 million cap under Regulation A.

This year, Allegiancy offered $5 million in securities under Regulation A in order to be poised to be a leader in this space.

Today, small and medium sized enterprises account for approximately 80 percent of the business in the U.S., historically delivering 100 percent of new job creation. Yet, it’s those businesses that face continual challenges in raising capital.

If Reg A+ does what experts and Congress expect, and allows that 80 percent of the companies in the country to raise capital and grow, “it creates a job opportunity for your daughter who is getting out of college next year,” Sadler said. “It creates a job opportunity for your husband who just got laid off. It allows businesses to grow on Main Street, where previously it was just the biggest companies on Wall Street.”

ABOUT ALLEGIANCY

Allegiancy is changing the business of asset management for commercial real estate owners and investors. With an advanced technology platform and singular focus on serving as the owners’ advocate, the company brings fresh vigor to an often poorly understood business. Combining its proactive Value Assurance? operational rigor with an intense focus on cash flow and profitability, Allegiancy is expanding on a track record of more than four decades of success.

Headquartered in Richmond, Va., and led by a team of seasoned professionals with more than 100 years of experience, Allegiancy manages properties that have outperformed their peers by 45 percent since 2006. The company has more than $300 million in assets under management (AUM) and delivers clients attractive returns and profitable, hassle-free investments in commercial real estate.

More information about Allegiancy may be found at http://www.allegiancy.us. To schedule an interview with Allegiancy’s leadership, contact Audrey Bevel at audrey(at)allegiancy(dot)us or 866.842.7545 ext. 204, or (804) 201-7161.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Allegiancy, LLC’s (the “Company”) present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” section of the offering circular dated January 14, 2014 and filed by the Company with the U.S. Securities and Exchange Commission on January 15, 2014. The offering circular, and any supplements or updates thereto, is available on the EDGAR system located on http://www.sec.gov.

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Stephanie Heinatz
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