•  Business Financing
  •  Main Street Business

SMBX - Invest in small and local businesses

SMBX is one among a growing crop of investment platforms intended to support small and local businesses, and offers investors the chance to invest in “small business bonds” with interest rates from 7-10% and terms from 3-10 years.


  • Founded: 2016
  • Investment Types: Main Street Business and Business Financing
  • Sectors: Restaurants, Hospitality, and Community
  • Minimum Investment: $10
  • Advertised Returns: 7-10%
  • Open to all investors
  • Great investor education materials
  • Very transparent investment terms
  • Services available across the entire US, catering to various property types.
  • Small selection of open investments
  • Short track record


This SMBX Review will help you learn more about SMBX's investment offerings, including how the alternative investments on SMBX are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.

Reg CF (“Regulation Crowdfunding”) is finding a nice niche serving the kinds of businesses that aren’t likely to attract interest from traditional venture capital, like restaurants, retail, and entertainment. SMBX follows the lead of LocalStake and Mainvest in squarely targeting just those kinds of businesses with their investment offerings, primarily focusing on small and local brick-and-mortar businesses.

Types of investments SMBX offers

SMBX offers debt investments in small, local businesses like restaurants, food trucks, music schools, and professional services firms. All investments are currently open to anyone via Reg CF.

What do you get when investing with SMBX?

SMBX currently offers one type of debt security they call their “Small Business Bond”. SMBX evaluates the business raising the bond to determine the interest rate, and then amortizes the principal and interest payments over the life of the bond (typically from 36-120 months, depending on the offering). There are no pre-payment penalties for the borrower, so investors may be paid back before the term of the bond ends.

Some of SMBX’s bonds are secured (by business assets), and others are unsecured (typically offering a higher return to compensate for the added risk).

How does SMBX make money?

SMBX itself doesn’t charge investors any fees, but does charge issuers a percentage of the amount raised (typically 3.5%), which investors should understand reduces the amount of capital the business actually receives for operations.

Potential returns and cashflow

Investments made via SMBX are high-risk investments in small businesses.

Investors receive regular monthly cash payments, including principal and interest according to an amortization schedule. Previous and current offerings have interest rates ranging from 6-10%.

Breadth of offerings on SMBX

As of this writing there are 3 investment opportunities available, with 23 prior offerings.

Regulatory framework

SMBX is an SEC registered Title III Funding Portal. That means they are subject to a range of rules and obligations around investor education and due diligence. All developers offering Reg CF investments on SMBX will have been through background checks of key officers and owners, and there are clear links provided to the relevant SEC filings made by the issuer.

Prospective investors also have access to an online channel for asking questions of the issuer (and viewing answers of prior questions from others).

On their website, SMBX outlines the criteria used to determine the interest rate for a given bond offering:

We analyze financial and qualitative information to understand a business’s capacity to repay its debts. The information we take into account, includes, but is not limited to: the measure of cash flow to service current debt (aka Debt Service Coverage Ratio); how aggressive, or risky, a company is with financing growth (aka Debt/Equity Ratio); ability of its short-term assets to cover short-term debt (aka Working Capital Ratio); financial trends; customer and vendor reviews; management tenure; competitive landscape; etc. We ask a lot of questions to understand the business model, its evolution, and its future intentions. Rates are also influenced by current market interest rates.

This review was first published on 17 September 2021.

Our Rating

Very Good

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