SBA advocate tours Nevada facilities

Tuesday, April 26, 2005

By Steve Moyer

Nevada Daily Mail

Wendell Bailey, former U.S. Congressman and small business owner, has been named Region Seven Advocate for the Small Business Administration. His region covers Iowa, Kansas, Nebraska and Missouri. Bailey was in Nevada Friday talking to small business owners about the services his office can offer them.

Accompanied by Sam Foursha, director of Economic Development for the City of Nevada, Bailey toured several businesses including Green Forest Engineered Products, Precision Aero and Cottey College.

Speaking to Mike Epperson, owner of Green Forest, Bailey said he was stressing two points on his visit. "The first thing is that I'm the regional advocate for a four-state area including Missouri," Bailey said. "My job is to help small businesses and stop the loss of manufacturing jobs in Missouri. Sam is important because of what he is doing here in Vernon County to attract and keep business in the area."

Bailey spoke of outsourcing, a practice that businesses use to keep labor costs down. "When we talk of outsourcing to foreign businesses it cuts two ways," Bailey said. "We like the prices but we don't like the loss of jobs. Another view, though, is that businesses are outsourcing jobs from cities to rural areas and that helps produce jobs in places like Nevada and Vernon County."

Bailey said his focus was on the regulatory aspects of businesses. "Some regulations are necessary," Bailey said. "But regulations can be unnecessary and overburdensome. Regulations can be an important deciding factor in why you locate a plant in New York or Vernon County. I've talked to a lot of manufacturers and one said, "Yes, I'll build a new plant, but not in America."

The regulations he would face here are just too much.

Bailey pointed out that outsourcing could also help an area.

"We've found that outsourcing is a good word for us," Bailey said. "Some manufacturers are finding that places like Vernon County have advantages to them. The large companies find that small communities are an advantageous spot for them to locate because of the eager workforce."

Bailey said that he feels that regulations should go through a review process that would involve business owners in the industry the regulations covered.

"House Bill 576, the Small Business Regulatory Fairness Enforcement Act, would help local businesses have that input," Bailey said. "We at the SBA are in charge of enforcing that act against government agencies that would impose their regulations on businesses."

Bailey mentioned a decision against the FCC. "Recently we won a case against the FCC," Bailey said. "It involved a regulation that required small phone companies to make phone numbers portable. For them it was just too much. We went to bat for them and the FCC had to scrap the regulation."

In talking to Ken Loomis, owner of Precision Aero, Bailey said that the SBA had increased the limits on some loans.

"The SBA, but not the division I work with, has just expanded their loan capacity from $1.2 million dollars to $10 million," Bailey said. "This is something Sam can use to encourage manufacturers to locate here. Using SBA 504 loans the bank can loan 50 percent, and get a first mortgage, the SBA would loan 40 percent and take a second mortgage, leaving the owner to supply a 10 percent investment in the equity."

Bailey said the increase was needed because costs were higher than when the loan program first started.

"This is so much more applicable to amounts needed by manufacturers today, Bailey said. "Now, this is in addition to the standard loan with an 80 percent guarantee by the SBA where the bank is at risk for 20 percent of the loan and the SBA is at risk for 80 percent."

Bailey said that small businesses have a huge economic impact on an area.

"Small businesses are 97 percent of manufacturers," Bailey said. "They are the backbone of the economy."

Bailey said that outsourcing manufacturing jobs could hurt a business if the items produced by the outsourced jobs are needed in a timely manner.

"There are certainly disadvantages to outsourcing jobs and importing foreign goods, especially if timeliness is important," Bailey said. "If the timeline requires goods to be on hand quickly then it is more advantageous to locate plants locally."

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