While cash from Uncle Sam may not be the top priority for startups, SBA loans can provide cheap capital
What is the difference between a startup and a small business? Semantics, mostly. As many startups struggle to raise funds from venture capitalists as funding continues to decline this year, the US Small Business Administration (SBA) could prove to be a powerful source of capital even as startups traditionally seek funding from other sources. sources.
Chris Hurn, Fountainhead’s founder and CEO, knows the potential benefits of taking on government funding. Fountainhead is a non-bank lender of government-guaranteed loans. Hurn said the current generation of entrepreneurs is focused on attracting equity-based financing from lenders such as venture capital firms — but that’s not their only option, especially as stocks are getting more expensive in current market conditions.
“The problem is that business owners often overlook fairly readily available debt,” Hurn told gotechbusiness.com. “They don’t have to give up equity. [SBA loans] can often be the exact stepping stone they need to move on to the next stage.”