Although Uncle Sam’s Money Isn’t a Priority for Startups, SBA Loans Can Provide Low-Cost Capital
What is the difference between a startup and a small business? Semantics, above all. While many startups struggle to raise money from venture capitalists as funding continues to dip this year, the U.S. Small Business Administration (SBA) could prove to be a powerful source of capital, even if startups traditionally seek funds from other sources.
Chris Hurn, the founder and CEO of Fountainhead, knows the potential benefits of government funding. Fountainhead is a non-bank lender of government guaranteed loans. Hurn said the current generation of entrepreneurs are focused on raising equity from funders such as venture capitalists, but that’s not their only option, especially since funds clean become more expensive under current market conditions.
“The problem is that business owners often overlook the fairly readily available loan capital,” Hurn told TechCrunch. “They don’t have to give up fairness. [SBA loans] can often be the springboard they need to take the next step.