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Show Small Businesses j In Utah Should Take Advantage Of Opportunities In Big Business By TOM BLSSKLBERG L.AYTON -- Utah's small businesses have a v irtually untapped : reservoir that could bring them untold growth--if they're willing to go alter it. NINKTY-KI(HT percent of the slate's businesses are small : and yet 50 percent of contracts from such giants as HAFB or : Morton-'I hiokol are filled from outside, says Kent Moon, district : Small Business Administration director, in emphasizing need for I state concerns to go after that market. I le's in a position to steer some loan funds their way. as well, ; he told the Layton Chamber of Commerce, noting his agency is set up to assist small businesses cxpand-it's not only after the : new, struggling concern. ADMINISTERING an economic loan portfolio of about $200 . million. Mr. Moon, whose ancestors helped settle Farmington, said that's "significantly below what it should be" considering the state's population, noting he could loan four-times that. "Utah doesn't have enough capital--our bankers have a limited capital pool they can pull from" and that often means local businesses must wait until a bank's resources are sufficient to generate needed expansion loans. TIIK SBA can work in concert with banks to provide necessary capital to finance that expansion. Operating in the "secondary market," SUA can guarantee a banker 90 percent repayment on a loan, allowing the banker to sell the original loan to a New York City banker, earning return on that, meaning the Utah banker has $90,000 immediately beyond the original loan to be reloaned at home, if needed, while additional capital is generated in New York. That allows for a monetary "multiplier affect," Mr. Moon indicated, calling such resources "unparellclled" and is far safer than the penny stock market, for instance, where a $1 million issue would cost $20-$30,000 to sell with no assurance the money'll come back. AND WHILE many expansion loans are set for five years and a 10 year amortization, causing the "ballooning" affect after five years, SBA allows for up to 20 years repayment, offering a regular guarantee at the market interest rate. There's no reason, though, Utah business, such as tooling and machining companies, can't share in the multi-million dollar contracts con-tracts from such employers as HAFB, he continued, noting that agency along with Thiokol and Sperry-Univac. for example, expend ex-pend $1 billion annually in procurement, and yet nine out of $10 for that goes to non-Utah firms. NATIONALLY, most such contracts go to firms east of the Rocky Mountains, and of those won in the West, the lion's . share 19 percent-go to California with Utah capturing well under one percent. , Many firms "can't or won't try here" to fill such needs because they believe the state's business can't meet their needs, he said, emphasizing, "the government doesn't go through a recession" and always requires goods and services. AS AN incentive, a new "prompt payment act" now requires federal payment on contracts within 45 days or interest will be charged with a similar program implemented for state jobs. "Forty percent of the nation's gross national product comes from small business. Big business lost jobs during the last recession reces-sion while there was growth in the small business sector," the University of Utah finance graduate said. Many of the traditional stable employers or smoke-stack industries are turning to the Third World countries for survival due to far lower labor costs. THAT WILL leave "brain-intensive" jobs for countries such as the United States, he added, quoting the popular "Megatrends" "Megat-rends" volume, where service-oriented business should grow to meet those increasing demands. |