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Federal budget cuts could affect availability of small business funding

Michael Schrantz

Aviation cuts unclear

One of the biggest talking points of the sequester has been the impact on air travelers.

The traffic at Yampa Valley Regional Airport already has seen its seasonal reduction from 12 daily flights in the winter to one flight per day in the offseason.

Airport Manager Dave Ruppel said that the last time he talked to the Federal Aviation Administration it still was uncertain how mandated cuts would affect an airport like YVRA.

Supplemental improvement funds could be impacted, Ruppel said. Those are annual funds YVRA receives and would go toward projects in the next year.

Ruppel said there’s also the concern that the FAA’s district office in Denver, which he said already is understaffed, could face further cuts.

Though cuts to the Transportation Security Administration have been discussed at the national level, Ruppel said, it’s still unclear if YVRA would see reductions beyond its already pared down offseason staff.

Aviation cuts unclear

One of the biggest talking points of the sequester has been the impact on air travelers.

The traffic at Yampa Valley Regional Airport already has seen its seasonal reduction from 12 daily flights in the winter to one flight per day in the offseason.

Airport Manager Dave Ruppel said that the last time he talked to the Federal Aviation Administration it still was uncertain how mandated cuts would affect an airport like YVRA.



Supplemental improvement funds could be impacted, Ruppel said. Those are annual funds YVRA receives and would go toward projects in the next year.

Ruppel said there’s also the concern that the FAA’s district office in Denver, which he said already is understaffed, could face further cuts.



Though cuts to the Transportation Security Administration have been discussed at the national level, Ruppel said, it’s still unclear if YVRA would see reductions beyond its already pared down offseason staff.

— Mandated federal budget cuts — also known as the sequester — have the potential to affect the Yampa Valley business community by limiting what ideas have a chance to become businesses.

Across-the-board cuts do not spare programs like the Small Business Association or other grant programs targeted toward small businesses.

Nationally, the SBA stated it would cut its small business loan program by $16.7 million, according to Politico.

In Colorado, the state business loan fund, which distributes Community Development Block Grant monies to 14 regions across the state, will see its funds shrink for the third year after previously expecting a slight increase, according to Jeff Kraft, of the Office of Economic Development and International Trade.

“Because of sequestration, we’ll have more like a 6 percent cut,” Kraft said about the $2.3 million the program now is expected to receive.

The 14 regions use the distributed monies to operate revolving loan funds. Because of this setup, Kraft said, some regions have been able to blunt the impact of program cuts.

“If they’ve been successful with their loans in the past, it gives them a buffer,” he said.

Routt County is in Region 12, and the Northwest Colorado Council of Governments is the local loan administrator for the area. The Northwest Loan Fund had stopped operating but has hired a new director and should resume activity in the near future.

Small Business Development Centers, which are funded by the SBA, also are seeing budget cuts.

Lindsey Stapay, director of the Northwest Colorado SBDC, said she’s trying to forge private partnerships and prove the program’s worth to those partners to help offset a budget that could be dry by the third quarter of this year.

Stapay has been in her position for only four months, but she said programs like the Colorado Workforce Development Council’s Sectors Summit work sessions have benefitted the vast northwest region by bringing businesses and partners together.

“From what I’ve seen in the northwest, they’ve been underserved by their funding resources,” she said. “There has been more funding coming our way because I think we’re getting better organized.”

Former Moffat County commissioner Audrey Danner took over the SBDC satellite office in Craig in late March. Danner is the interim executive director of the Craig/Moffat Economic Development Partnership, which works with the SBDC in Craig. She said the Craig SBDC uses both SBA funds and local partnerships to help develop businesses in the area.

The Yampa Valley Entrepreneurship Center at Colorado Mountain College’s Alpine Campus in Steamboat Springs is not part of the SBDC program and will not see its funding affected by SBA budget cuts.

Along with Yampa Valley SCORE mentors, the center helps entrepreneurs establish the capital needs of their business and, if necessary, directs them toward an outside funding mechanism, such as a small business loan.

Wade Gebhardt, who heads small-business lending in the Colorado resort market for Wells Fargo, said the funds available for SBA-secured loans grew after the recession.

“We have done more SBA lending over the past year-and-a-half to two years than had been done through the SBA in the previous 10,” Gebhardt said. “More than 50 percent of the lending we’re doing is SBA enhanced in some shape or form.”

With more than a billion dollars in SBA-secured funding done companywide by Wells Fargo per year, Gebhardt said, the scale of the budget cuts won’t significantly affect small business lending.

He said conditions for small businesses have been steadily improving and that he’s seeing stronger incomes and balance sheets. Some businesses have been able to take advantage of small business loans to buy the buildings they’re in at lower rates than they were renting for, Gebhardt said.

Scott Ford, a local SCORE mentor, said that SBA cuts could impact a subset of loans to entrepreneurs who lack collateral to otherwise secure funding, but more important to the Yampa Valley is “fostering the culture of entrepreneurship.”

“The challenge is not always the money, but it’s having an idea that’s fleshed out,” Ford said.

To reach Michael Schrantz, call 970-871-4206 or email mschrantz@SteamboatToday.com


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