While cash from Uncle Sam may not be the most important thing for startups, SBA loans can provide low-cost capital
What a difference between a startup and a small business? Semantics, mostly. Many startups are struggling to raise funds from venture capitalists as funding continues decrease this yearThe US Small Business Administration (SBA) can prove to be a powerful resource for capital, even if startups traditionally seek funds from other sources.
Chris Hearn, founder and CEO of Fountainhead, knows the potential benefits of public funding. Fountainhead is a non-bank lender that issues loans under state guarantees. Hearn said the current generation of entrepreneurs is focused on raising equity-based financing from backers such as venture capital firms, but that’s not their only option, especially as capital becomes more expensive in the current market environment.
“The problem is that business owners often overlook the fact that debt capital is quite readily available,” Hearn told TechCrunch. “They don’t have to give up their equity. [SBA loans] can often be the exact stepping stone they need to get to the next stage.”