What is Main Street?
Main Street is synonymous with America’s independent small businesses. Named after the common term for the principal commercial streets in small towns, it signifies community-based, independently-owned enterprises that are the bedrock of local economies. In the UK, the equivalent term is ‘High Street.’
In broader terms, ‘Main Street’ refers to small-town American traditions and historic business districts. In finance, it denotes small to mid-sized businesses integral to local economies.
Key Takeaways
- Local Significance: Main Street always connotes local businesses and their impacts.
- Individual Players: It includes local businesses, consumers, and financial service firms.
- Contrast With Wall Street: The opposite of Main Street is Wall Street, representing major financial firms and corporations.
- Global Context: In London, Main Street is known as High Street.
- Support Systems: Various grants and loans are available for Main Street businesses.
Building Main Street Resilience
Main Street is a common street name in the U.S. and represents over 31.7 million small businesses as of March 2020, spearheading the country’s local economies. The COVID-19 pandemic severely impacted many of these enterprises, highlighting the vulnerabilities and resilience of Main Street businesses.
In finance, Main Street is often juxtaposed with Wall Street. Main Street usually refers to individual small investors, whereas Wall Street is about professional securities traders. Tensions can rise, with stereotypes fueling mistrust between the two. Yet, both depend on each other—Main Street investments generate significant revenue for Wall Street, while Main Street relies on Wall Street for better returns on investments compared to traditional savings forms.
Types of Main Street Businesses
The quintessential Main Street business is a locally-owned, non-chain store situated prominently within a community. These businesses include:
- Essential Services: Pharmacies and hair salons
- Retail Stores: Clothing boutiques, bookstores, specialty shops
- Food & Drink: Coffee shops, breweries, bakeries, restaurants
The pandemic led to a decline in some traditional Main Street businesses like restaurants. Yet burgeoning industries like craft coffee shops and breweries provide optimism for Main Street’s bounce back.
Main Street vs. Wall Street
Main Street can also denote a smaller, independent investment company offering personalized financial services to local professionals and families, contrasting with Wall Street’s big corporations serving institutional clients.
The dichotomy expresses that regulations aiding Main Street can restrict Wall Street operations and vice versa. However, aligning interests is crucial because misalignment, as seen in the 2008 financial crisis, can lead to widespread economic turmoil.
Investing in Main Street
Supporting Main Street financially extends beyond local patronage. Using platforms like Mainvest and Localstake, individuals can invest directly in Main Street businesses through crowdfunding and peer-to-peer lending.
Main Street investments involve a higher risk compared to traditional Wall Street stocks, ETFs, or mutual funds. Yet investing in small local businesses can drive community economic growth and stability in a way large portfolios may not.
Government Support for Main Street
Main Street Lending Program
In response to the COVID-19 pandemic, a $600 billion Main Street Lending Program was established to support small to mid-sized businesses and nonprofits.
Main Street America
Additionally, programs like Main Street America provide grants and loans further aiding local businesses. This initiative is part of the National Main Street Center, Inc, supporting the historic and commercial restoration of Main Streets.
The Bottom Line
Thriving Main Streets symbolize vibrant local economies and improved quality of life, especially in smaller communities. Despite the COVID-19 adversities, robust support systems have been crucial. Investing time and money locally can help reinvigorate these economic lifelines and foster healthier, balanced communities.
Related Terms: High Street, local investments, small businesses, local economy, financial markets.
References
- U.S. Small Business Association. “Frequently Asked Questions”.
- CNBC.com. “Uncertainty Is Back on Main Street As Delta Variant Rattles Reopening Plans”.
- Inc.com. “Main Street”.
- Brewers Association. “2020 Points and 2020 Predictions.”
- Crimson Cup. “Top 5 Reasons to Open an Independent Coffee Shop in 2021”.
- NBC News. “A Tale of Two Pandemics”.
- Mainvest.com. “Mainvest. About Us”.
- Localstake. “Localstake: How It Works”.
- Associated Press. “How Can Wall Street Be So Healthy, When Wall Street Isn’t”.
- Federal Reserve System. “Federal Reserve Takes Additional Actions to Provide up to $2.3 Trillion in Loans to Support the Economy”.
- Main Street America. “Funding Opportunities”.
