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Show The Enterprise Review, July 7, 1976 Page 3b SBA: Help or Hindrance to Utah Business? Continued From Page lb sors awarded another national honor to the Salt Lake office. An analysis under the direction of Gertrude Petersen, assistant dean at the University of Utah's College of Business, was considered the best analysis in the nation in sional" and "one of the best offices in the U.S.," one banker shrugged, "They're just government workers." Sometimes, too, even the bankers who most warmly support them have com- plaints. Far and away the most common complaint among SBA officials in bankers and customers alike, Finally, Salt Lake fondly point to a it the amount of time it takes program at Hill Air Force Base to get an SBA loan. SBA designed to insure that small statistics show that the averbusinesses get their share of age loan application is procesmilitary contracts awarded by sed in 13 calendar days v. 20 that installation. During the days nationwide. But bankers past seven years, the program complain that the actual wait has been the most successful for a prospective loan custof its kind on Air Force bases. omer could be closer to 35 or 40 days. Complained one of small businessman, who has Leery Bureaucracy been both approved and reAs in every business, the jected for SBA loans, "A man Salt lake SBA office reflects can go under while they're the personality of its boss -- making a decision." Clair Hopkins. Talkative, and enthusiastic Guilt (he friendly his is of a be to says part job cheerleader for the other emSome of the blame, some bankers admit, should be dirployees), Hopkins is a businessman with experience in ected at their institutions. everything from ranches to Often applications are not restaurants. Although he completely filled in by either sports a long record of service the banks or the customers in government (mayor of Verand the SBA office must ask Direcfor further details. nal, state legislator and of of tor Finance for the State Many bankers are also Utah), Hopkins is an avowed appalled at the paperwork who is required to complete an SBA loan. One banker who chose leery of government bureauto remain anonymous, said cracy. Part of his distaste for there is a "heck of a lot of red government restriction stems tape which becomes fairly from an experience several frustrating at times. It takes years back when Hopkins got an inordinate amount of from a govthe time." ernment agency. We try to act Bankers estimate it takes like they (the customers) are anywhere from 20 to 50 hours doing us a favor by coming to complete the paperwork the SBA could still refuse in. Hopkins' has also been the loan. As a result, some successful in establishing bankers will be as discouragclose ties with the banks. ing as possible when discussThrough a series of seminars ing an SBA loan to save across the state, Hopkin's themselves unnecessary staff has drilled bank execupaperwork if the customer tives on SBA's criteria for decides against the loan. insuring loans. As a result, Others view the loans as a the banks now weed out many "public service" with little applicants who do not meet profit incentive. the SBA's requirements while Customer Bombarded Too encouraging other customers to apply for them. "The banks The customer is also are our greatest advocates," with forms to be filled Hopkins said. In fact, on the SBA's 20th out. Several businessmen 1973 Utah the. who had received SBA anniversary, Banking Convention formally guaranteed loans said they endorsed a resolution "com- were spending up to 60 hours mending the Small Business to complete what one businessman estimated was "a Administration and in partiOffice inch thick of forms." District half cular the Utah The applications can also for fulfilling its lofty mandate Ronald be expensive. to the small business comJ. D. Holyoak, Cammons, owner of a window munity." senior vice president of Zions covering company, estimated he spent $400 for registration Bank, concurs that the banking community has "greater fees, title search and other confidence" in the SBA " closing costs" for his SBA people an attitude that's not loan. (Conventional loans can common throughout the be equally expensive.) Some of the hottest connation. troversies range around loans to the "economically disadDissatisfaction with the SBA minorities and vantaged" ' SBA's national Not everyone is ecstatic or veterans. even satisfied, with the Salt lending objectives include AlLake office, however. promoting minority enterthough a large majority of prises. The SBA also "bends bankers who deal with the over backwards" to help out y basis veterans, Evans said. SBA on a Yet the praise it as "very profes 1975. Self-Admitt- ed "free-enterprise- r" "run-aroun- d" nd attitude has angered some Caucasians. Larry D. Hansen, whose business consulting firm was refused an SBA loan, praises the SBA staff. But he's beginning to listen a little closer when he hears people say, "If I was Japanese, I'd have four SBA loans like the family down the street. But since I'm not a minority, I can't get a thing." of-the-li- ne Minorities Favored Dave Cowan is another businessman who blames his rejection at the SBA office on a "highly discriminatory" attitude favoring minorities. "If you're you don't have to have much of anything," he said. and personal capital for minority owners. Yet. Evans insisted, no one is refused a loan just because he isn't "black". He sees the SBA's liberal stance toward minorities as an "equalizer" with Caucasians still holding the upper hand. Need for Collateral Some businessmen also think that the SBA discrimin ates against firms with large current assets (which can't be used as collateral) in favor of firms with large fixed assets (which can be used). He feels that the SBA has taken a too cautious attitude towards protecting itself against a borrower's possible default by stressing a borrower's need for collateral. Evans agreed that the SBA keeps "one eye" on a firm's collateral, but insists the major criteria for securing a loan is the firm's chances of repaying it. He maintains collateral is a criteria "way down the line" when a loan is approved or rejected. Possible Solutions What can be done to Continued on Page 5b Paradoxically, some min- ority leaders feel that the SBA is not doing enough for their people. Paul Martinez, an executive in a company designed to provide venture capital for minority enterprises, said the Salt Lake office is "much more conservative than offices back East." He said the office's conserva- (aw at tive interpretation of rules "chokes off" many loans and, as proof, points to the minuscule number of minority businesses in Utah. Caught in the middle between charges that they are both too generous and too frugal with minorities, local SBA officials point out that of the 300 to 400 THURSDAYS LA CAILLE NOW OFFERS FINE COUNTRY DINING THURSDAY, FRIDAY, SATURDAY EVENINGS AND SUNDAY FOR BRUNCH minority-owne- d businesses in Utah, nearly 145 have received an SBA loan. Few other states can match this percentage. While still insisting that a business be capable of repaying the loan, the SBA is also willing to relax its requirements for collateral Qmil Jm j -- j in-nuna- - - day-to-da- step-to-the-en- d- When speed is necessary, a metropolitan airport isn't. If your time is valuable, driving to those places can be as well arduous. Consider a charter as from Thompson Flying expensive, Service. Within a Salt Lake City radius of 500 miles, well set you down in two and a half hours or less, in almost any spot where you have business. (There are over 700 airstrips within this radius; only 20 serviced by commercial airlines.) 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