CDA sets stage for SBDC takeover

The Commonwealth Development Authority is finalizing an agreement with the U.S. Small Business Administration to set the stage for its takeover of the management of the local Small Business Development Center.

CDA Board Chair John S. Tenorio said he will discuss with the Northern Marianas College the possibility of forging a partnership to allow the agency use NMC’s facility while its runs the program.

According to Mr. Tenorio, CDA will evaluate the performance of the current staff and decide who should be retained or removed. SBA will no longer renew the SBDC program with NMC when its contract expires on Dec. 31, 1999 because of dissatisfaction with the performance of the present staff.

“We do not really want to get involved with the operation, we just do not want to lose the program,” he said.

On January 1, 2000, CDA will make a vacancy announcement to entice those interested in the post to apply for the job. A staff of four in the local SBDC would need around $260,000 to run the office.

Should NMC refuse to cooperate with CDA, Mr. Tenorio said he will tap the Saipan Chamber of Commerce and the Rotary Club to assist him in carrying out the task.

In six months time, CDA will be able to provide the service of assisting clients on setting up businesses as well as how to secure loans from banks.

Former NMC President Agnes McPhetres has earlier belittled the capability of CDA to run the program due to conflict of interest.

One of the components of the SBDC program is to assist people who are getting into business like drafting a marketing analysis and completing the requirements in seeking loans.

Similarly, CDA is helping local businesses avail of loans either through its own program or acting as guarantor in case of huge bank loans. Ms. McPhetres feared that such situation would create problems, thus, it would be better if the program is handled by the Department of Commerce.

NMC has also announced that it will look for federal grants to be able to continue running the same program as she stressed that SBDC programs should fall under institutions of higher education.

But this is not entirely true according to Woodrow McCutchen, executive director of the Washington D.C.-based National Association of Small Business Centers. He said 25 percent of established SBDC under the U.S. SBA are not located in universities or colleges.

“For example, the California SBDC network, the largest in the United States, has 47 subcenters throughout the state, but only six are university or college based. Likewise, in Texas, another major SBDC network state, nearly half of the SBDC subcenters are non-university or college based,” he said.

Mr. McCutchen said it is the responsibility of the state or regional SBDC network director to ensure that the organizations selected to host SBDC subcenters are “the best resources” and are “committed in working in harmony with both the network office and the other SBDC subcenters throughout the network.”

The main objectives, he said, are the to have the SBDCs located where they can best serve the small business community, and to have the subcenters hosted by responsible institutions that will run them in accordance with the ASBDC certification standards, SBA regulations and the laws governing the SBDC program. “Furthermore, host
institutions must be capable of properly managing SBDC funds,” he added.