On Monday, I ducked my croquet game to attend a presentation on the Auraria campus about "How Your Business Can Benefit from Federal Stimulus Money." I was hoping to see for myself what advice was being given to small business owners by a state official, Maranda Pleau, who has been touring the state to speak on the topic. (Photo: Mark Martinez; Credit: mscd.edu)
You might remember that on Aug. 14 I posted a blogspot on the distribution of $87 million from a state/federal capital construction program for San Luis Valley schools, and I connected the funding to Pleau's tour, assuming that her presentation would tell small business owners in the Valley how they might get a piece of that action.
I was wrong, and I was told I was wrong by Pleau's communications manager Myung Oak Kim, who read the blog and told me I should attend one of Pleau's presentations to find out what she was saying in them.
So I did. And frankly, I was disappointed.
Pleau, who is formally called the Director of Small Business and Minority Outreach for the Governor's Economic Recovery Team, told an audience of about 60 people, some of whom were minority business owners or women business owners, that her team's tasks so far had been difficult, especially the "very arduous" process of tracking stimulus dollars. That is one of her missions: to tell the people of Colorado how stimulus dollars are being spent.
The problem with her presentation, however, is that mission seems to be her only mission. She does not offer specific advice, other than recommending business owners check out the recovery team's website, www.colorado.gov/recovery, that might land a small business a grant or a contract to keep they're business going.
In fact, one business owner at the Nov. 9 presentation complained that she had run through all the traps on the website, searched out grants and contracts that might get her new business, but that all the material she searched seemed to suffer a basic "disconnect" from the information she really needed. She needed direct paths to bidding for work, and she wasn't finding them.
Mark Martinez, regional president of Solera National Bank, which has capital available to lend to qualified business borrowers, helped sponsor Pleau's presentation but came away from it as disappointed as I was.
"It's total spin," said Martinez. "All I was told was here's all these millions of dollars and here's how they're being allocated, by category, but there's no discussion as far as ... where those dollars are landing and how those dollars are ending up in the pockets, or potentially in the pockets, of small business or business in general."
"You sit through the presentation, and at the end of the day you're sitting there thinking: I didn't learn anything."
Martinez, who has served on the board of trustees of Metro State College, where Pleau gave her talk, said he knows that education stimulus dollars have been used to "backfill" against budget cuts, a strategy school administrators claim is the only way to protect current programs and jobs.
But the banker asks: "Where's the stimulus in that?"
And he's right. He said he has no clients who have reported to him that they have been able to tap into stimulus dollars, and he said SBA loans cited by Pleau in her talk would have been been made to qualifying businesses despite the stimulus effort. Martinez did acknowledge, however, the federal government has made it easier for banks to make some SBA-guaranteed loans.
Small, $35,000 loans being made available through SBA to small businesses as emergency funding are not profitable to banks and are designed to go to businesses who are poor loan prospects, Martinez said. You can read more about the limited success of that SBA emergency loan-program in today's Denver Post, http://www.denverpost.com/.
Banks across the country have been reluctant to loan money through the program. "We're not a charitable organization," Martinez he added. "We're a financial institution."
But to get back to Pleau's small-business coaching, or lack of it, there are some legitimate reasons for state government to not hold hands with businesses seeking federal money to fund new growth. The press and political critics could perceive the help as favored treatment.
But Pleau's "outreach" efforts need to go beyond talking about where the stimulus money is being spent.
Minority-owned businesses have historically been left out of Colorado's procurement process, and true "outreach" will help small businesses directly connect with state agencies and other organizations distributing stimulus dollars through grants and contracts.
There's no sense in talking to small businesses about $87 million to be spent on school construction work in the San Luis Valley unless small businesses, minority-owned businesses, and women-owned businesses can share a piece of the $87 million pie.
The state, so far, has failed to open up a direct path for small business to such work.