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Who's Looking Good Now?

After the dotcom crash, low-tech businesses may see a funding surge.

This story appears in the August 2001 issue of Entrepreneur. Subscribe »

Until the bottom dropped out under the dotcom stampede, business owners saw very few headlines about growth financing for traditional low-tech businesses. But with high-flying tech companies nose-diving, banks and investment firms seem to be not only helping more established nondotcoms, but also proudly publicizing the fact.

Huntington Capital, a San Diego-based SBIC just licensed by the SBA in January, has announced that its focus is primarily on getting much-needed growth capital into the hands of small businesses that have been around for at least two to 15 years and have proven business models and consistently good margins. Those companies, says Barry Wilson, president and CEO of Huntington Capital, have always had the hardest time getting cash. For one thing, bankers often don't give entrepreneurs all they need because they don't have enough capital to satisfy the bank's loan-to-value ratios. And venture capitalists typically don't want to waste time on a million- or half-million-dollar deal when they could spend the same amount to raise $10 million or $50 million or more and get a much higher return.

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