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Funding easier for small business

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By Katy Korkos

The Small Business Administration (SBA) announced Thursday that studies by the nonpartisan Urban Institute have found that SBA programs are more effective than conventional loans in reaching minorities, women and start-ups, and that SBA loans are a key financing tool for creditworthy small businesses that nevertheless do not meet conventional underwriting standards.The studies were commissioned by the SBA to study the agency’s lending effectiveness, and also showed that during the period studied, 18.8 percent of firms that received a conventional small business loan with a term greater than one year got an SBA backed loan.In Los Alamos, the picture is somewhat different, in that very few SBA-backed loans are being sought. Almost all of the business people who approach conventional lenders for funding have done their homework, prepared their business plans and done their market research. Local lending institutions are able to provide commercial loans to qualified borrowers without relying on the SBA guarantees, said Kevin Holsapple, executive director for the Los Alamos Commerce and Development Corporation (LACDC).“LANB is really good about loaning money when the applicants have a sound business plan, so usually we don’t go that route (of helping with the SBA loan paperwork).” Holsapple estimates that fewer than 18 percent of local small businesses receive the SBA backed loans.The SBA manages an investment program and a bonding program in addition to the loan guarantee program. The SBA’s website states that “SBA’s current business loan portfolio of roughly 219,000 loans worth more than $45 billion makes it the largest single financial backer of U.S. businesses in the nation.”The Small Business Development Center (SBDC) in Central Park Square is the local resource for people who are considering starting a business, as well as for existing businesses looking for specific help in running their businesses. The SBDC acts as an outreach program for the SBA, and will provide help for people interested in getting the SBA guaranteed loans, in addition to dozens of other services offered at the center. The local SBDC office is a program of the LACDC.“The SBDC works with about 160 clients each year,” Holsapple said, adding that the types of businesses served include retail, service, manufacturing and nonprofits.“About 40 percent of them are just in the early stages of thinking about a business,” Holsapple said.From January through September 2007, the SBDC spent a total of 914 hours in business counseling, offered 14 business training workshops with 160 attendees and assisted with 25 new business creations, creating 66 jobs and $100,000 in capital investment.The SBDC has scheduled 14 more workshops for the spring season, on topics from basic bookkeeping and developing a successful business plan to recruiting and hiring. The business workshop schedule is available online at www.nmsbdc.org/losalamos, under the “Events” heading.The SBDC is part of the state’s NMSBDC network, whose motto is “Building New Mexico’s Economy One Business at a Time.”The program is a joint effort of the University of New Mexico at Los Alamos and the Los Alamos Commerce and Development Corporation. The center is located in the Los Alamos Small Business Center, and open from 8 a.m. to 5 p.m. Monday through Friday. Aspiring businesspeople can contact the UNM-LA SBDC at 661-4803 for more information. To schedule a confidential appointment with an SBDC business counselor, call 662-0004.