Alternative Venture Finance: Federal Grants and Loans Business Articles | June 16 Herr Nike Air Max 270 Flyknit Olive Flak , 2005

While most companies seeking venture capital initially think about angel investors and venture capitalists, a large alternative source of financing is federal grants and loans. The two largest federal grant programs are run by the Small Business Administration (SBA), and by Small Business Investment Companies (SBICs).



An SBA loan, regardless of whether it is a direct loan from the SBA, or Herr Nike Air Max 2018 Elite KPU TPU Svart Vita Butik , as is more common, a bank loan guaranteed by the SBA, is essentially a bank loan. The benefit of it versus a traditional bank loan is the rate. SBA rates are typically much less than traditional business loan rates.


In most cases, in a guaranteed SBA bank loan, the SBA guarantees 90 percent of the loan will be repaid to the bank. As such Dam Nike Air Max DLX KPU TPU Rosa Vita , banks are at much less risk than in most other loans, and are a bit more flexible with regards to who they offer these loans. However, the SBA usually requires the founders of the company to personally guarantee the loans, which makes them risky should the venture collapse.


Alternatively, Small Business Investment Companies (SBICs) are privately organized corporations that are licensed and regulated by the SBA. Small or emerging businesses which qualify for assistance from the SBIC program can receive equity capital andor long-term loans