The U.S. Small Business Administration is looking to expand its reach and scope among Puerto Rico’s entrepreneurial community this fiscal year, by spreading the word on a number of long-standing initiatives that should result in increased lending activity.
Furthermore, following several meetings with members of the local small business community, Kellie LeDet, newly appointed regional administrator for Puerto Rico and the U.S. Virgin Islands, said she will be discussing with her superiors establishing and expanding a number of programs that could boost exports — a key factor for growth.
For one, she said she will be presenting the possibility of expanding Puerto Rico’s Historically Underutilized Business Zones — HUBZone — classification to include all 78 municipalities. The program helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities. A present, only a small portion of the island is classified as a HUBZone, which limits the number of businesses that could qualify for benefits.
“We met with House Speaker Jaime Perelló, and in a presentation to us, he explained and defined to us the need to have the entire island of Puerto Rico classified as a HUBZone,” LeDet said. “This is something I will take back to the administrator [María Conteras-Sweet]. I don’t know what we can do at this point, but whatever I can do, I will.”
Another possibility that came up last week was establishing an Export Assistance Center in Puerto Rico, something that would likely convince small businesses on the island to consider this type of activity as part of their activities, said SBA District Director Yvette T. Collazo.
“Perelló believes that if we have an export center to encourage that kind of thinking, that you can sell the island to get into the global market, then that activity could certainly see an increase,” Collazo said.
The SBA currently operates 20 Export Assistance Centers throughout the U.S. mainland, with the one in Miami providing services to Puerto Rico. The centers have the support of the SBA, the U.S. Department of Commerce and the Export-Import Bank to provide assistance to exporters.
An export center provides small businesses with the tools they need to understand exporting better and helps them identify markets where they could be successful.
“People suffer for a lack of knowledge. It’s important to educate possible entrepreneurs and small business owners about the global market place and where the needs exist for their products and services,” LeDet said. “They need to know who and where the experts are.”
While the agency officials said they don’t know how quickly either of these concepts could become a reality, Collazo said the SBA will continue to work hand-in-hand with local businesses, especially in areas that have been identified as underserved.
“We’re trying to target markets that are not necessarily well-represented in our portfolio,” Collazo said.
During Fiscal 2014, which ended Sept. 30, the SBA backed about $75 million in loans to businesses in Puerto Rico. Included in that total are 7(a) loans, which offer quick financing to qualified applicants.
“That type of lending was up 14 percent last year, which is higher than the national trend of 12 percent. When I started [in 2013], we had about one-third of municipalities in Puerto Rico that didn’t have any loans at all,” she said.
“This year, I counted only five or six towns that don’t have any loans. We have to do targeted marketing and go to those places that are not getting loans because they either don’t know about the programs, or forgot about them,” Collazo said, adding the plans to visit every town in the next couple of years to drive the message about the SBA’s financing programs.