Colorado SBA director offers help in addressing small business problems

Greg Lopez, right, director of the Colorado District Office of the U.S. Small Business Administration, and James Van Horn, a lender relations specialist with the office, talk with small business owners during a meeting at the Business Incubator Center in Grand Junction (Business Times photo by Phil Castle)

Phil Castle, The Business Times

Greg Lopez knows he can’t personally solve every problem facing small businesses in Colorado.

What the director of the Colorado District Office of the U.S. Small Business Administration can do, though, is talk to those who could help. And the requests, complaints and suggestions he passes along are taken seriously, he said. “One of the biggest tools I have at the SBA is the power of influence.”

The SBA itself responds to the needs of small businesses in the lending and assistance programs it offers, Lopez told a group of small business owners during an informal discussion in Grand Junction. “I’m here to serve you. Hold me accountable to that.”

The meeting at the Business Incubator Center was part of a swing through Western Colorado for Lopez and James Van Horn, a lender relations specialist with the SBA Colorado District Office in Denver.

Most of the discussion in Grand Junction involved various aspects of SBA loan guarantee programs and access to capital for small businesses.

The SBA doesn’t make direct loans. By guaranteeing repayment on a portion of the loans, however, the federal agency enables banks and other lenders to extend financing to small businesses that might not qualify under conventional terms.

In Colorado, the SBA backed nearly 1,300 loans worth a total of almost $559 million during the 2012 fiscal year. Of those totals, 25 loans worth a collective $5.8 million were issued in Mesa County.

One small business owner who attended the Grand Junction meeting told Lopez he’s been approved for loans through both the SBA 7 (a) and 504 programs. But he’s concerned the cost of the project he’s financing has increased during the 12 to 14 months it took to receive the commitment.

Lopez said the SBA has control over many portions of loan processing, but not the background checks of borrowers conducted by the FBI.

There’s a possibility, though, the SBA could take on that function itself and complete it more quickly.

Van Horn said it also could be possible to adjust the terms of the loan to provide additional financing.

Lopez said it’s important for small business borrowers who encounter delays to communicate with their lenders and the SBA. “If it takes too long, reach out to us.”

Other aspects of the SBA loan guarantee programs were questioned at the meeting, including 20-year terms for repayment. Extending those terms could help borrowers.

Pat Berry, a loan officer with the Small Business Finance Corp. in Grand Junction, suggested the SBA reinstate a program allowing borrowers to refinance traditional commercial loans through the 504 program.

Lopez said the SBA has considered and changed many provisions of its loan guarantee programs, increasing the maximum amounts and guarantee levels and for a time even waiving fees.

Jon Maraschin, executive director of the Business Incubator Center and a former commercial banker, said access to capital remains a problem for entrepreneurs who want to start or expand ventures.

More stringent regulations make it difficult for bankings to extend financing, particularly for startups, Maraschin said. In Mesa County, the value of real estate businesses use as collaterial has decreased.

Lopez acknowledged it can be difficult for small businesses to access capital, especially if they have no collateral or  history of cash flow. But the SBA can help, he said. “What we do through SBA is make you bankable.”

Lopez also acknowledged the more stringent regulations put in place in the aftermath of the financial crises in 2008. He said he’d be willing to talk to members of the Colorado congressional delegation to address that concern. He also said he could arrange a telephone call with the head of capital access at the SBA.

Meanwhile, the SBA continues to offer  training and other assistance to entrepreneurs of all kinds, Lopez said. Funded in part by the SBA, a network of 14 Small Business Development Centers throughout Colorado offer free and low-cost counseling and training. That includes the center operated at the Business Incubator Center.

New SBA initiatives focus on helping military veterans and seniors considering entreprenurial ventures, he added.

Maraschin said he expects the Business Incubator Center to join in efforts to assist veterans going into business. “We’d like to be a partner with that.”