The cost of crowdfunded debt doubled — and it tracked the Fed almost perfectly.
We mapped the actual terms behind every funded Reg CF deal. The median interest rate on crowdfunded debt and convertibles rose from 5.5% in 2016 to 11.5% in 2024 — moving in lockstep with the rate-hike cycle.
At the same time, Reg CF quietly became a small-business debt market: loans went from under 8% of deals to more than 1 in 5.
Crowdfunding isn't just equity anymore. It's a financing menu — and it has a price.
Comment "CCLEAR" and I'll send you the full brief.
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This is an important point. It seems to suggest reasonably that companies that can borrow money from banks under conventional SBA terms (or better) do that in traditional ways. Those that can't qualify for those terms, use regulated investment crowdfunding at a higher price. Makes perfect sense.
Exactly right and the data shows it's two effects stacked. Your point is the level: Reg CF debt prices above bank/SBA because a lot of these borrowers can't (or won't) tap conventional credit — a real access premium. What the brief adds is the change: the doubling from 5.5% to 11.5% is mostly the Fed pass-through — when money got expensive everywhere, it got expensive here too. So it's an access premium sitting on top of the rate cycle.
One wrinkle to your framing — it's not always "can't qualify." Some choose Reg CF debt for speed, for no collateral or personal guarantee, or for the marketing value of turning customers into investors. But for a big chunk, you've nailed the mechanism.