Federal Reserve wants to hear from New Mexico businesses T By Finance New Mexico
Wyoming, Nebraska, Kansas, Missouri, Oklahoma and New Mexico.
he Federal Reserve Bank of Kansas City wants to hear from small businesses in New Mexico about the experiences they’re having in the credit market. Every year, most banks in the Federal Reserve system’s 12-bank network participate in a national Small Business Credit Survey to get the data they need to provide policymakers, business representatives and service providers with up-to-date information about business financing and credit conditions. Northern New Mexico falls under the jurisdiction of the Kansas City district, while Southern New Mexico is under Dallas’ district umbrella. This year, the Fed especially wants to hear from business owners in Colorado,
To administer the survey, the nation’s central bank teams up with organizations, or “distribution partners,” to encourage small-business participation. For the purposes of this survey, small businesses are defined as those with 500 or fewer employees. The survey aims to bring busi ness concer ns to the attention of the regulators who r un the world’s most powerful financial institution, and research results are shared with central bank presidents to help infor m monetar y policy decisions and determine the obstacles and opportunities that small businesses are facing in the credit market.
MAINSTREET | FROM PAGE 2
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degree work practically handin-hand with each other.” Neither Lazarz nor Newberry disclosed Hannum’s annual salary — MainStreet is a nonprofit 501(3)c organization, and as such, it’s not required to do so. He said an annual 990 tax return can be requested at the end of the year from the New Mexico Attorney General’s Office. An informal meet-and-greet session with Hannum was held Oct. 19 at Gallup Coffee Company. Gallup has had two prior MainStreet executive directors over the years, dating back to 2006: Sarah Luginbuhl and Lindsay Mapes. Gallup is the only entity in the state with MainStreet and an Arts and Cultural District designations, officials have said. An arts-and-cultural designation is given by the state and comes with tax credits, financial advantages, and other resources. Gallup previously lost its two MainStreet designations, but the most recent one surfaced under the Mayor Jackie McKinney administration.
have been indoctrinated into the work ethic of his family who own several businesses across the Navajo Nation. “I sometimes will go to work at 10 a.m. and not come home until 4:30 am. This is very common,” he said. “I’ve been able to watch my family do this and I’ve been able to take from them the teachings that work and are successful.” A lt houg h M ike ha s a n MBA from the University of Arizona, he said there is no MBA course on how to open a business on an Indian reservation on trust land where you can’t get financing. These situations, and sometimes obst a cle s, a re u n ique t o Indian country. Professor at Arizona State University, Robert J. Miller was a part of the same session and supported that the potential for business opportunity on the Navajo Nation is enormous. Miller is a citizen of the Eastern Shawnee Tribe of Oklahoma and more recently a member of t he Nav a jo Nation Council of Economic
COMMUNITY
IMPORTANT DATA
It also helps the Fed’s partner organizations acquire firsthand data so they can understand the challenges faced by local and regional businesses and tailor programs and ser vices to the needs of sta r tups, micro bu s i ne s s e s a nd g r ow i n g companies. According to an executive summary of the 2015 survey: • F i n a nci ng i mproved i n 2015, but half of all businesses applying for loans experienced funding shortfa lls between the third quarters of 2014 and 2015. “Microbusinesses and startups had the largest unmet financing needs with 63 percent and 58 percent, respectively, reporting a financing shortfall,” the survey reported. • Small banks are the lenders of choice: “Traditional bank lending continues to be the
primary source of financing for small businesses. Credit applicants were most successful and most satisfied with their borrowing experience at small banks.” • Online lenders, despite their convenience, have the lowest rates of borrower satisfaction. “Overall, 20 percent of employer firms applied at an online lender,” the survey revealed. “While the approval rate was relatively high for applicants (71 percent were approved for at least some credit), approved firms … reported concerns with high interest rates and unfavorable repayment terms.” The survey also noted that cash flow is a universal problem for small companies, as is finding skilled workers; most employers (63 percent) have small amounts of debt secured with personal assets; almost half of all companies
applied for credit in the past 12 months — mostly to expand or meet operating costs; and half of all applicants received less than what they asked for from lenders.
All New Mexico businesses are welcome to share their perspectives and experiences during the Sept. 12 - Nov. 23 survey period. The national results will be announced in March. The survey takes about 10 minutes for a business owner or key decision maker to complete. Follow this link to get started: bit.ly/2ddtVkc. F in a n c e Ne w Me x i c o a ssi st s in div i du a l s an d b u sin e sse s with obt ainin g s k i l l s a n d f u n din g resources for their business or idea. To learn more, go to FinanceNewMexico.org.
Advisors. Although there is potential, there are also obstacles that entrepreneurs will need to overcome before seeing immediate success. “There are obstacles of infrastructure, lack of water and electricity and having sufficient seed money. We are in a rural area with small customer bases within rural communities,” he said. Miller said that the human capital aspect must also be taken into account. “Human capital is more than the sheer number of people. First of all, are the people trained? Are they able to work Monday to Friday from 9 am to 6 pm? Does the workforce have skills to work in a certain industry?” he asked. These are considerations that all entrepreneurs and small businesses must assess to maximize potential growth and revenue. The lack of competition on reservations for small businesses is a positive aspect if the businesses can get up and running, he said. “The potential for every kind of business is here, especially for a reservation of this
size,” Miller said. “We want to buy like everyone else and jobs contribute to developing entrepreneurial spirit.” Du r i ng h is welcome address, President Russell Begaye acknowledged that tribal bureaucracy and administrative processes could be stif ling to small business ow ner s. O f t en bu si ne s s owners have to chase their packets through the la nd department to get their land situated. These lengthy processes can sometimes cause business owners to back out. “Business owners run at 100 mph while the Nation runs 10 mph. I know the red tape and I see contracts. People don’t realize the amount of time it takes. But we’re working to foster better process for the benefit of small business. Sometimes just changing one word or sentence in a policy can really help the business owner to get their business going,” Begaye said. The president reinforced that he always opts to search for Navajo business owners to fill contracts that he signs off on. “W hen I rea d t h roug h
these contracts I think of our Navajo business owners,” he said. “If I know of a Navajo business that could do the job, I send the contracts back to seek Navajo businesses.” The B2B Summit was a forthright effort on behalf of the OPVP and DED to facilitate better opportunities for small businesses to be successful in gaining tribal contracts, RFPs and business opportunities. Feedback noted the summit to be a first for the Navajo Nation, u nprecedented in terms of content. Participants felt the educationa l component i n t r a i n i ng to be beneficial in providing information on certification they can utilize to optimize their successes. Before closing, President Begaye commended the business owners in attendance. “You know what it’s like to work,” he said. “You’re the first to be on the site and last to leave. You are passionate about your work and you believe in it,” he said. “Even in light of stifling policies, you are still working to be successful. Thank you and god bless you.”
TAKE THE SURVEY
Gallup Sun • Friday October 21, 2016
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