Invest in small businesses & earn monthly income

SMBX offers businesses an easy way to finance themselves while also offering everyday investors the opportunity to earn strong passive returns. 

But how does SMBX work? 

What are the potential returns and costs involved?

In this detailed SMBX review, we’ll walk you through what it offers, how to get started, its annual returns, and much more.

Investment risk


Min investment


Target return

5% - 10%



Investment Types

Small Business Bonds™



Minimum Investment


Annual Fee

There are no fees charged to investors

Annual Returns

Up to 10%



Open to investors outside the US?

No, SMBX is only open to investors with a US bank account



      Best for

      • Non-accredited investors looking for passive income

      • Investors eyeing medium-to-long term investments

      • Investors looking for an affordable and accessible way of diversifying their portfolio

      What is SMBX?

      Founded in 2018 and headquartered in San Francisco, California, SMBX is an online investment marketplace where you can purchase their Small Business Bond™. It allows businesses to raise capital from individual investors instead of opting for a bank loan.

      For small business owners, this makes it easier to raise capital with less regulation, lower fees, and without having to give up a stake in the business. 

      There are benefits for the investor as well. 

      With extremely low investment minimums, anybody can invest in businesses they care about. In exchange, you receive your principal amount and interest paid back on a monthly basis.

      Who should use SMBX?

      SMBX is a great investment platform for: 

      • Non-accredited investors looking to generate passive income through interest payments.
      • Investors with an eye for excellent medium-to-long term investments.
      • Investors looking for an affordable and accessible means of diversifying their portfolio.

      How does SMBX work?

      Here’s how SMBX operates: 

      1. SMBX analyzes each business’s operating history 

      Before SMBX lists a business, SMBX first analyzes its operating history to ensure it’s profitable.

      SMBX’s underwriting team only qualifies businesses that meet their criteria for risk. SMBX considers factors such as how aggressive the company is with financing its growth, its current cash flow, management tenure, financial trends, and more.

      2. SMBX lists available offerings 

      SMBX then lists all businesses that meet its minimum criteria on the platform. Here, you can see the remaining time available to invest, how much each company has raised, and the expected yield.

      There’s detailed information about the business, including its story and how it intends to use your funding. You'll also find relevant financial documents, including the bond prospectus and the issuer’s financial information. 

      3. Invest in your favorite businesses

      You may place bond orders on any offers listed on the Marketplace.

      Investor funds are housed in an escrow account managed by North Capital Private Securities until the close of the bond offering. Once fully funded, the business receives the money and the bonds are issued to investors.

      After the investors have received their bonds, the business will begin its monthly repayments one month after the bonds have been allocated. 

      Note: You cannot resell or transfer your bonds for one year from the date of issue.

      SMBX features

      Here are some of SMBX’s key features:

      1. The Small Business Bond™

      A  Small Business Bond™is a unique asset type developed by SMBX. It functions in much the same way as a term loan with a fixed interest rate

      For example, if a business wants to raise $100,000 on the platform, SMBX will handle the issuance and recordkeeping of the bonds. Once the offer has been fully funded, the business receives the money and investors receive the bonds. 

      Then, the small business agrees to pay the principal + interest to the investors on a monthly basis. 

      2. Customers can become investors

      Instead of investing in companies on the S&P 500, you can fund companies in your local community. This way, SMBX empowers investors to finance the businesses they care about and support local business. 

      3. Passive income generation

      One month after the settlement date (after the bonds have been allocated), investors will begin receiving their principal + interest each month for the duration of the repayment period.

      You can either keep the funds in your SMBX Book (account), withdraw the money to your bank account or reinvest it in new offerings.

      4. Additional Security Measures

      SMBX takes privacy and security seriously. To ensure your data remains secured, SMBX utilizes encryption methods that exceed industry standards. All data, data backups, and communications are encrypted. 

      Further, the platform uses techniques like SSL pinning to ensure SMBX only communicates through legitimate SMBX servers. 

      Additionally, SMBX goes to great lengths to protect your account. The platform undergoes weekly vulnerability scans to identify and address vulnerabilities in the infrastructure. 

      SMBX also leverages next-generation firewalls, VPCs (Virtual Private Clouds), and ACLs (access control lists) to restrict access between internal systems and external networks.

      How to get started with SMBX

      You can view all SMBX offerings without creating an account. However, to start investing, you’ll need to sign up. To do so, head over to their website or download the mobile iOS app. 

      Then, follow these steps: 

      Step 1: Begin by selecting whether you’re investing as an individual or on behalf of an organization.

      Step 2: Then, create a username and fill in your email address and password.

      Step 3: Once you’ve done that, fill in your legal name, date of birth, and address.

      Step 4: Next, SMBX needs to calculate your investment limit. To do so, you need to include your estimated annual income, net worth, whether you’re an accredited investor, and how much you’ve invested in crowdfunding offerings over the last 12 months. 

      Step 5: There are some disclosures you need to do before progressing.

      Step 6: Once you’ve done that, registration is complete. You should receive an email asking you to confirm your address.

      Step 7: The last thing you need to do before investing is link your bank account or credit card. SMBX uses Plaid (a payment service), so connecting your account is as easy as possible. You’re now free to invest in the various opportunities SMBX has on offer.

      SMBX fees

      SMBX charges investors no fees at all if you’re investing through your bank account. If you use your credit card, however, there’s a 4% transaction fee. 

      Instead of charging investors, SMBX charges businesses a 3.5% service fee of the total amount raised. Businesses are also charged a $100 annual maintenance fee through the maturity of their bonds.

      SMBX Potential Returns

      SMBX determines the yield for each investment by looking at financial and qualitative information to understand the business’s ability to repay its debts. They analyze financial trends, the competitive landscape, customer and vendor reviews, and more. 

      As a result, returns vary on a case-by-case basis. 

      However, the average annual expected return is around 8%.

      For example, if you were to invest $1,000 into an offering with 7.5% interest and a 5-year maturity, you would receive $1,000 principal back plus $202.28 of interest at the end of the 5 years. 

      Investors receive this through 60 monthly payments of $20.04. If you were to reinvest those monthly payments back into other bonds, returns would be significantly higher.

      Pros and Cons of SMBX

      Here are the advantages and drawbacks of investing through SMBX: 


      • Investors can finance businesses they care about.
      • The platform is open to non-accredited investors.
      • These investments can generate passive income.
      • Extremely low investment minimum of just $10.
      • Investors incur no fees.


      • The platform is only available to US investors.
      • There’s no mobile app for Android devices.

      Risks of Investing Through SMBX

      As with all investments, investing with SMBX carries a degree of risk. The businesses you’re investing in may buckle and be unable to repay your investment. 

      However, SMBX includes all relevant documentation, including the bond prospectus, the prospectus summary, and the issuer’s financial information. 

      The bond documentation, for example, highlights the business’s collateral, what may happen in case of a default, how much interest they pay on other loans, and other valuable information. 

      Further, SMBX is governed by the rules and regulations established by the SEC (Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority).


      SMBX’s Small Business Bonds™ help you fund your favorite businesses, support your local economy, and can generate solid passive income in the process. 

      If you’re interested in learning more about other alternative investments, take the MoneyMade Investor Quiz. All you need to do is answer a few simple questions, and MoneyMade will suggest a list of alternative investments that suit your investing needs! 

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