Representative Pete Lee has introduced a bill into the Colorado legislature - HB13-1253 - that proposes the conduct of a study on access to capital by Colorado small businesses.
The bill calls for the Colorado Office of Economic Development and International Trade (OEDIT) to engage a contractor knowledgeable of Colorado's capital markets to conduct a survey of Colorado small businesses to gather information on their ability to obtain needed capital. This data will be analyzed and presented to the State of Colorado with recommendations in policy and administration of existing state programs.
There is a perception by many entrepreneurs that the capital markets are more concerned about large businesses than small businesses. This concern is sometimes extended to government agencies that focus on recruiting large businesses to relocate to Colorado as their economic development policy.
The first hearing on the bill will be held at 1:30 on March 21st before the House Committee on Business, Labor, Economic and Workforce Development.
Brian Tsuchiya, owner of the StartUp Guru, a consultant to entrepreneurs and one of the leaders in crowdfunding, stated “I support this legislation. Access to capital for small businesses is not well understood and under represented.”
One ex-banker stated that he didn't believe a study was needed because the problems of small businesses in raising capital has more to do with a failure to create solid business plans, weak management and lack of sufficient collateral for debt financing.
This position does not sit well with Greg Olinyk, a veteran investment banker working with private equity investment, who stated that based upon his experience, he did not expect “the American banking community …to do anything other than make it excruciatingly difficult for new businesses to start and even well established businesses to grow.” Because a business cannot meet narrow lending criteria, does not make the business bad.
Gordon Nuttall, CEO of Couragent, is also “greatly in favor of the bill.” He stated that institutional lenders “just don't understand the day-to-day of a small company with limited tangible assets.”
The shortfall in capital available to small businesses, market myths and special interests are all problems faced by the Colorado Capital Congress which supports the bill. The Congress is a non-partisan public forum, sponsored by the Sullivan Chair in Free Enterprise at Regis University.
Deb Bourg, an entrepreneur and member of the Colorado Capital Congress stated “To the larger point, small businesses are not waiting for banks to figure it out. These creative entrepreneurs are coming up with creative financing--Kick Starter [a form of crowdfunding] is just the tip of the iceberg.”
If you feel strongly about the bill, you may appear and testify as a citizen witness or share your views with Representative Pete Lee at sepetelee@aol.com.
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