Easy Money?

Access To Capital

Industry pundits say the changing of the guard probably won't have as much of an impact as general macroeconomic trends, the health of the public markets and investors' willingness to sink money into good ideas, even after a tumultuous correction. "Most early-stage investors are gun-shy now, and I don't think the election is going to change that," says Dave Pell, the managing partner of Arba Seed Investment Group and author of daily e-newsletter Davenetics, which provides links to top tech stories.

While access to capital still exists, says Jim Goetz, partner with Palo Alto-based venture capital firm Accel Partners, the dotcom fallout has led to an emphasis on solid business plans and good management. He says, "The return to the basics will continue to be the focus of the venture community." Assuming the IPO market picks up again, VC experts say that return is good for both businesses and investors.

The small-business lending climate won't prove much different, says the SBA's Mike Stamler. Many factors will determine how much cash entrepreneurs will borrow during Bush's term: bank liquidity, interest rates, the economy's overall direction, the demand for capital and the inflation outlook, among others.

"[These factors] affect entrepreneurs' thoughts about whether to borrow money or postpone it," says Stamler. "And all of them affect the availability of loan capital on affordable terms. What Bush can do with Congress is make sure the safety line provided by SBA loan guarantees remains available to creditworthy small businesses otherwise [unable] to get loan capital under reasonable terms."

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This article was originally published in the March 2001 print edition of Entrepreneur with the headline: Easy Money?.

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