SBA might be able to help with impacts from construction
July 30, 2014
GLENWOOD SPRINGS — Businesses that stand to be hurt by major public infrastructure projects, such as the upcoming Grand Avenue bridge replacement, can find some help through the U.S. Small Business Administration to make sure their interests are represented.
In addition to offering business-plan counseling and start-up loans, helping small businesses obtain government and private contracts, and providing emergency disaster assistance, the SBA also runs the Office of Advocacy.
According to Edward Cadena, the new district director for the SBA in Colorado, that's one place business owners can go to make sure their voice is heard when it comes to the potential economic harm that can be caused by large construction projects.
While a new interchange, bridge, highway or local street improvement can ultimately benefit local businesses, it's important to help those businesses prepare for and survive the interim, Cadena said during a visit to Glenwood Springs earlier this week.
"We can help people figure out what those impacts may be, and make sure they are part of the planning," Cadena said.
The SBA can also help business owners work with the state or local governments on any economic injury claims, and may be able to assist in providing low-interest loans, he said.
Cadena was joined this week by newly appointed SBA Region 8 Administrator Matt Varilek on a four-day tour through several Western Slope communities, meeting with business groups and local government representatives.
"Since we are both new faces we wanted to take the opportunity to introduce ourselves and share with business people and economic development groups the different programs we offer," Varilek said in an interview with the Post Independent.
Their Glenwood Springs stop included meetings with the Roaring Fork Business Resource Center and local chamber officials.
"We do rely on partnerships with these types of organizations to be able to maximize the impact of our programs," said Varilek, who oversees a six-state region including Colorado, Wyoming, Utah, Montana, South Dakota and North Dakota.
Primarily, he said the goal of the SBA is "to help small businesses start up, to grow and to succeed."
Last fiscal year, the SBA made $622 million in loans to small businesses in Colorado. The organization also works to provide a guarantee on loans from banks and nonprofit lending institutions, and has the ability to add to loan amounts, Varilek said.
One program that hasn't yet taken off in Colorado is the Small Business Investment Company program, which provides a 2-to-1 match on any private equity raised by businesses or business groups.
"We have almost 300 funds nationwide, but none in Colorado," Varilek said. "We are working on expanding that program in this district."
Among the challenges for start-up businesses in mountain towns and smaller communities in Colorado is understanding how those unique markets work, Cadena said.
That's where the SBA's counseling and mentoring services can come in handy, starting with development of a sound business plan, he said.
"Prior planning prevents poor performance," said Cadena, who has spent 18 years with the SBA including stints in Las Vegas and New Mexico.
"We spend a lot of time emphasizing that people develop a business plan," he said. "We also want them to remember that it's written on paper, not in stone. It is intended to be a living document."
Local Small Business Development Centers, such as the one located in Grand Junction, can provide counseling resources and also work to develop volunteer mentors with expertise in different types of businesses to help others get started.
A strong business plan is important when it comes to obtaining a start-up loan or other types of business loans from the SBA, and should spell out how much is needed, what it will be used for, and how it will be paid back, he said.
"If someone's passion doesn't make any money, that's a hobby," Cadena said. "If it makes money, it's a business."
The SBA is also now waiving loan fees for borrowers on loans of $150,000 and less, which is the typical start-up amount, Varilek said.
That same provision is extended to new business start-ups by military veterans up to $350,000, he said.
"We are seeing that veterans tend to start businesses at a higher rate because of the skills they learned in the military," he said. "We want to facilitate that."
SBA was also a big player in providing business disaster relief following the wildfires and flooding on the Front Range last year.
"We can help impacted businesses with special loans for uninsured damages," Varilek said. "It is a way to bridge the gap until they can get back to normal."
Cadena also highlighted the SBA's 504 program, which helps business secure their future by providing mortgage loans so that they can get out of lease situations and own their place of business.
The loans are typically for longer terms in order to keep payments within a business's cash flow, he said.