Some small business owners want lawmakers to approve a controversial — and possibly illegal — plan to have state taxpayers guarantee loans they get from venture capitalists.
The proposal made Monday to key lawmakers is designed to generate needed expansion cash for companies who have found that traditional lines of credit, including banks and private investors, have dried up. John Adam Kowalski, former chairman of the Arizona Small Business Association, said that cash is absolutely necessary if companies are to grow here.
What they want is a system that consists of several layers of investors and funds.
While the mechanism is somewhat complex, the bottom line is that the plan, if approved, is designed to make private venture capital investors more interested in putting money into these firms. That would occur because the state would step in as the ultimate backer for that loan or investment, providing tax credits to compensate if the company could not pay back all or part of the money.
To read the full, original article click on this link: Arizona small businesses want state to guarantee venture capital loans - East Valley Tribune: Arizona
Author:Howard Fischer
