Vox Pop, a unique multipurpose store in Brooklyn, brands itself as the anti-Starbucks. This locally owned store is a coffeehouse, a bookstore, an entertainment center, and a place for neighbors to relax, grab a cup of fair trade coffee, and discuss the latest news.
However, the owner of Vox Pop recently found himself in a financial bind after opening a second location in the midst of the economic meltdown. A bit of creative financial genius helped save Vox Pop from going out of business. CNN calls it communal capitalism; customers of the shop bought shares of the business for $50 each, and within 10 days, more than 200 customers purchased over $64,000 in this community buy-in.
Although the owners are still paying off bills, neighborhood residents are able to enjoy their fair trade coffee while supporting a local business. Creative finance is helping many small businesses make it through the current financial crisis.
In March, NPR featured Dante Hesse, owner of Milk Thistle Farm in Ghent, N.Y. Hesse wanted to expand his organic dairy product line but needed a significant infusion of cash. With banks tightening up the purse strings, Hesse also looked to the public to finance his small business. Hesse offered a 6 percent interest rate for unsecure $1,000 loans.
As the state of the American economy remains on shaky ground, creative finance ideas like these will likely continue to make the news.