24 Top Tools for Local Investing
By Michael H. Shuman
- Move Your Money – Move all your day-to-day financial activities, including your checking, loans, credit cards, and mortgage, to a local bank or credit union. These are the institutions that recycle their capital locally—so much so that even though local and regional banks account for only 20% of the assets of all banks, they provide more than half of all the loans to small business.
- Start A Credit Union – If your community doesn’t have a local bank or credit union, then start one. Credit unions are easier and cheaper to launch than banks, and many communities have small credit unions managed by part-timers or volunteers.
- Create Targeted CDs – By law, local banks and credit unions must be very conservative with their money, so they are often wary of loaning money to any local businesses without full collateral. A few banks, such as Ithaca’s Alternatives Credit Union, have agreed to set up special certificates of deposits that fully collateralize loans to high-priority local businesses. Eastern Bank in Boston has a CD that collateralizes a line of credit to Equal Exchange, a local fair-trade company.