I remember about 8 years ago when I was founding a company to repair cell phones. The local municipality had a program where I could meet with a mentor to help

I remember about 8 years ago when I was founding a company to repair cell phones. The local municipality had a program where I could meet with a mentor to help me set up a company. Create a business plan and estimate costs and revenues, which could serve as input to a loan application with a local bank. In this scenario, the bank charges interest and does not get an ownership stake nor input into how the company is run. Whatever happened to this way of doing things? What is it about VC that is so much better than small loans from a traditional lending institution?