Local bankers and small-business owners shared their struggles and suggestions with staff of the Delta Regional Authority during a round-table discussion Friday.

The Delta Regional Authority is a federal-state partnership that supports job creation by providing grants for projects in its region, which covers parts of eight states along the Mississippi River.

The session at the Show Me Center was led by Chris Masingill, federal co-chairman of the Delta Regional Authority.

When it comes to working with small businesses, Delta Regional Authority's mission is to help provide access to capital and create a support system for entrepreneurs, Masingill said.

"It's your passion, but how do you translate that passion into a real business opportunity? There are some real challenges there," Masingill said.

Last year, Southeast Missouri State University's Center for Innovation and Entrepreneurship partnered with the Delta Regional Authority to train teachers across the region to put on Operation Jump Start training programs to help those interested in starting their own businesses.

While traditionally economic development has focused on recruiting manufacturing, the nation's economy is shifting away from large companies and leaving small businesses responsible for job creation, said John Mehner, executive director of the Cape Girardeau Area Chamber of Commerce.

"We need to make it as easy, yet responsible as possible for people to do this," Mehner said of people wanting to start small businesses. "The climate has to be there or we will shut down a lot of people who have ideas and abilities."

Several representatives from local banks spoke about the challenges they have in working with small businesses. Banks often aren't able to loan money to people looking to start a business because they lack the credit scores or collateral needed to convince loan officers to take a risk by loaning them the money, bankers said.

"We routinely visit with people who have been laid off and now see this is the opportunity to start this business they've always wanted to. We need to get them help to put their plan in writing so I can understand the risk. There's a lot of risk out there. There's also a lot of ideas out there," said Kevin Greaser, community bank president at Alliance Bank in Cape Girardeau.

Also on Friday, the Delta Regional Authority and Southeast Missouri State University's Center for Innovation and Entrepreneurship announced a partnership with microlending not-for-profit organization Accion. The firm, which will have an office in the center on the Southeast campus, makes small loans to entrepreneurs who might not qualify for traditional bank financing.

Accion can help turn business clients that traditional banks would view as high-risk and lacking collateral into bankable customers, Masingill said. Its average loan amount is $12,000 to $14,000.

Banks also said they're struggling to understand all the new banking regulations being imposed by the federal government.

While complying with sweeping financial reform bill signed into law by President Barack Obama last year is challenging for banks, small businesses also face overwhelming regulations from the environmental Protection Agency, the Department of Labor and the Occupational Safety and Health Administration, said Matt Henson of US Bank.

Marla Mills, executive director of Old Town Cape, said not only do business owners need help getting their businesses off the ground, they also need support after they've opened.

"It can be challenging for small-business owners to ask for help and admit they are struggling," Masingill said.

There is also a communication gap about what assistance and financing programs are available to businesses, Masingill said.

Bill Ransdall of the Missouri Department of Economic Development and Gov. Jay Nixon's designee to the Delta Regional Authority, agreed, saying that his department recently received a $10 million grant to be used for low-interest loans for small businesses, but they've only had eight applicants.

"Part of the issue is education. A lot of people aren't aware of them and don't know how to access them," he said.

The state also doesn't have many economic development incentives for retail businesses.

"At DED our tax credits are primarily for manufacturing. It's a shame when we see retail opportunities we can't really participate in them," he said.

The Delta Regional Authority recently studied how many Small Business Administration startup loans, known as 7(a) loans, have been granted in its eight-state region. While "mom and pop" businesses in the region as a whole have already received more SBA startup loans in 2011 than 2009, Missouri lags behind other states in SBA funding.

Higher loan guarantees and waived fees created a surge of loan applicants in 2010, Greaser said. He said if SBA did that again, it would help take away some of the risks small banks have in making those loans.

mmiller@semissourian.com

388-3646

Pertinent address:

1333 N. Sprigg St., Cape Girardeau, MO