Minding Your Business; 369; Ryan Gleason, USDA-Rural Development Rural Enterprise Grant Program

MINDING YOUR BUSINESS IS PROVIDED BY SUPPORT FROM SEAL LEVITINO OF AMERIC REALTURES, Proud to be associated with the quality programs and community service projects of PBS and KRWG TV. By Camino Real Builders, a committed partner with KRWG Broadcasting, providing educational, informative and entertaining programs to our region. And by the New Mexico Humanities Council, working with local groups to bring programs about culture and the human experience to all communities in New Mexico. KRWG TV presents MINDING YOUR BUSINESS. A look at the people, places,

events and issues that impact the business and economy of Southwest New Mexico, with your host Charles Comer. Hello and welcome to MINDING YOUR BUSINESS, a show where we explore business, economic development, community resources and events, and issues that impact our region. This week on MINDING YOUR BUSINESS, it's time for another visit from USDA Rural Development and New Mexico director Ryan Gleason. This time to talk about the rural enterprise grant program. Ryan, welcome back. Well, thanks for having me. Pleasure to be here. Do the old handshake. And in our previous show with you folks, we talked about our bags and our bogs. That's right. That's right. And it seemed like something that we needed a little more time about. You guys certainly thought so because you wanted to talk about this enterprise grant program. General overview. Let's start with that. This is one of the few ways in which we and frankly,

much more of the government is able to provide grant money. We're making a shift in the government away from grant money towards direct loans and guaranteed loans. And we're doing it for a fairly simple and a fairly good reason. We get a lot more bang for your tax dollar when we loan it out and get it repaid or when we guarantee a loan that the private sector makes and we only pay your money when a loan goes bad. So that's the direction in which we're moving. But we do still have some grant programs because we understand, Congress understands that there's simply some organizations that aren't ready to even take out a loan. Even if it's low interest and long-term and the repayment period is stretched out to an annual period instead of a month late. I mean, there's just some organizations that aren't even ready to get there. So we have a couple of grant programs and as you pointed out, we have our own language in rural development and we refer to these R-Bags and R-Bogs and people don't have any idea what they are. So part of

what I wanted to do today is explain what this R-Bag is, rural business enterprise grant. It's a program where we are helping to develop businesses in rural communities. We define rural in this program as less than 50,000 people but we're not giving the money directly to businesses. We're giving it to an organization that will support that business or those businesses. We actually are hoping that they will support many businesses within a community. The good news is about this program from the organization who receives the grant perspective is that they don't have to repay it. They just have to show us that they're doing some good work with it. So to throw probably an oversimplified analogy, in this case an R-Bag isn't the seed, it's more the fertilizer. I like that. Do you like that? I can run with that. I can run with that. No, who's eligible for an R-Bag? It's going to be a public body. So a municipality or a county, although we don't typically do a lot with them, they are eligible. A federally recognized

Indian tribe would be eligible if they wanted to do some economic development activity in their community. They could come to us. But far and away the organizations that we do the most work with are nonprofits who have as their purpose for being to support businesses. Typically what you think of is economic development corporations or chambers of commerce. But there are several nonprofits around the state who don't fit into those two categories, but that support business development in their communities. One maybe with not as obvious a name as like the Masee Valley Economic Development Alliance, which is an example of what you were talking about fits in the categories of chambers of commerce and those kind of things. Now, how can the grant money be used? You give it more to the incubators, the support folks. How are they allowed to use that money? Well, they're going to do it to support small and emerging businesses. And that's

an important component that we have to throw into this whole mix. Campy, a business that's been in town 20, 30 years. And it can't be a business that is too big that can do the work on their own. I mean, at some point you figure that a business is big enough that they just do their own internal economic development. Yeah, they should be able to have enough collateral borrowing. Right. Exactly. So what we're working with are businesses of less than 50 employees and less than a million dollars in gross revenue annually. So that's how we do it. And they can start to interrupt a lot of businesses out there that fit in that category in Mexico. You bet. You bet. To the extent that we can say we're fortunate in that situation, we're fortunate in New Mexico to have a lot of these businesses that we can help. And these are the ones that create jobs. It's not the Intel's and the Ford Motor companies of the world that create most of our jobs. Most of our jobs are created in this country in small businesses, something like 95 percent of all new jobs are free there, but they add up a lot like a tiptoe. Exactly. So to get back to your

question about how the money can be used, they can use it to support the business by doing things like business plans or feasibility studies, provide technical assistance. They can also buy equipment that the small business would need, but that they can't afford to buy. And they can then lease it to the small business. So in an indirect way, the business is getting the support through the money that we are providing to this nonprofit or this municipality. The other thing that they can do is take this money and capitalize a revolving loan fund, which they would then take, for example, $100,000 and loan it out in chunks of five or $10,000 to several of these small and emerging businesses. As they begin to receive the interest payments and principal payments, they take the money and relend it out. And so the money revolves through the loan fund. That's where that term comes from. And supports many businesses in a community.

All right. Now, can you give us an example of how our beg money has been used here in New Mexico? I can give you several. The one that we brought some video on and so the one that we got to talk about is the Espanol Valley Fiber Arts Center. And this is a group of folks who realized that their industry was sort of dying off. That the Fiber Arts was a rapidly lost art, becoming a lost art. And so they decided that they needed to be able to teach the next generation about how to do it. They needed to buy some of this equipment and have it available for folks to come in and use so that they didn't have to own it themselves. And so a non-profits formed. We provide them with some money and a way they went. We've got a video put together by our friend Ernie Watson from USDA RD. And so let's take a look at it. Let's do. The Spanish introduced sheep in the treadle loom to northern New Mexico in the late 1500s. Since then, northern New Mexico weaving has become a rich cultural part of our state's history. Today, more than 400 weavers from across

the region make up the membership of the Espanol Valley Fiber Arts Center. The center was founded in 1995 by a small group of weavers who wanted to make sure that the tradition of weaving continued. The founders of the center discovered many families had looms that they inherited, but the same families had little knowledge of the heritage and techniques of weaving practiced by their grandparents. The strength in the art of weaving, the center provides learning and teaching experiences for weavers of all ages and backgrounds. By doing so, the center also provides encouragement and training towards economic sustainability in the fiber arts. They can take classes here in all kinds of fiber arts techniques and business classes to help them develop a fiber arts business. And they can use the equipment and supplies here. They can rent equipment to develop their own products. We have a lending library that's a research library to help them learn and plan projects. We have a staff that's on hand to help them with their projects or any technical

assistance that they might need. We do, we have a lot of a variety of economic opportunities. We hire between 25 and 30 part-time teachers every year. They're all fiber artists, local people, most of them. We bring in a couple of big-name teachers from other parts of the country, but and our staff are all fiber artists also. And then we have a consignment gallery here where members can sell their work. And they get 70% of the sale. And we do shows together, we do four shows a year. The center has been located in an old Adobe structure for the last 10 years. Recently, it was discovered that the building was in need of some major repairs. The Espanola Valley Fiber Arts

Center applied for and received a $200,000 rural business enterprise grant. This money will be used to pay for the repairs, which in turn will allow the center to continue providing its services to weavers and their customers. Ryan, what a great example and I was just telling you some really great shots taken by Ernie on that. Are there any limitations on how someone like this can use the money? It's not going to come as a great surprise to you. The federal government is going to place some limitations on how grant money in particular not as usual. What might come as a shock to you since we are a proud part of the United States Department of Agriculture is that this money cannot be used for agricultural production purposes. And there's a good reason for that. We have the farm services agency as a part of our organization and they are focused solely on agricultural production. So they have all of the programs that are available to assist somebody who wants to do ag production. We have, as our mission, supporting those communities that are typically agricultural-based,

rural, but we don't do the ag production. Another limitation is that you can't use this money to do comprehensive area-wide planning. You got to be focused on a small town, a rural community and assisting that community. We don't want to see the money diluted is really what it is. We're going to cross an entire county or a multi-county region or something like that. We want to get as much bang for our buck as we can. We talked about that revolving loan fund. We're not going to let them charge exorbitant interest rates or those kinds of things. We're not going to allow them to use the money to go steal jobs from our friends in Texas. So we're not going to let you go help relocate a business to New Mexico. At that point, while it's good for New Mexico, it's bad for Texas, and this is our federal programs. We're trying to benefit the entire country. So you can't go do that kind of thing. And we're not going to let you use the money for support a cable TV system.

That's one of those that I still don't know why that restriction exists, but it always makes me laugh that it's out there. And so I throw it out every time that I come in and talk about this program. But there's specifically. Now, let's talk applications for this. How are they processed? Well, they're going to come into our state office here in New Mexico, and our state office is in Albuquerque. We actually would like for you to have the discussion first with the local office, in this case, Los Cruces, simply so that they can help you develop the application before it even gets to the state office. And we don't have to kick it back from Albuquerque. And you don't have to deal with our folks in Albuquerque. We want to bring these programs as close to you and your rural communities as we can. But once they come in, we're going to have you do a pre-application. And let us see if we're going to waste our time and your time on going through the full application process. If you're wanting to do something for comprehensive area-wide planning,

we're going to go ahead and say, that's not an eligible purpose. So don't waste your time going through the whole application process. But there may be some other resources available from you folks, another program. And we may be able to help you think through the program that you want to do, the project that you want to do, and structure it in such a way that it would qualify for this. So we want to do that. And then we're going to have you go through the formal application process. And there are, as you would well suspect, there are a lot of applications that come in for grant money because there's just not very much of it. And so we're going to score, based on a score sheet that's available to you, the application, and figure out who has the best applications, and then we'll fund to those to the extent that we have the money to do so. What about non-profits? Are they going to have any difficulty getting money like this? Not in terms of being eligible for it. The difficulty may come in filling out the paperwork. Because it is grant money, because it's in its purest form, it's your tax dollars that we are

taking and giving to another organization, we want to make sure that that organization is using them for eligible purposes and using them responsibly, that they're going to use them to actually create some jobs. They're not going to use them for what sounds like an economic development purpose, but really is a trip to Hawaii to talk about economic development purposes. So there's going to be some work that you have to do up front to get this, but we work really hard to make this as easy as possible if it's a good project. Now we are running a little tight on time. We've got an example on video, and this is where Fano e-commerce center we've talked about where Fano e-commerce center before, but that was broadband. That's right. This is a follow-up project that we did with them to help them use the broadband more effectively. They set up a web portal so that they could sell their goods using the broadband infrastructure on the internet to a worldwide

market instead of selling it to a middleman who gets it to the worldwide market and actually makes most of the money. So this is a way where helping them make a lot more money off the good work that they're doing. Fantastic. Let's check it out. Let's do. Raffano sits on the northeastern edge of the Navajo Nation within side of the Colorado San Juan Mountains. For the most part, those living in Raffano are employed in the agriculture industry, or they travel to various types of jobs in nearby communities such as Farmington. However, many still supplement their incomes by selling the native arts and crafts the Navajo people are known for. In the spring of 2007, USDA rule development provided $436,000 to bring broadband communications to the Raffano chapterhouse. As soon as the communications center was open, they began seeing the effect of this technology. Schoolchildren began doing their schoolwork on computers and people for the first time were able to communicate to the outside world via the worldwide web. In the fall of 2007,

rural development provided an additional $50,000 rural business enterprise grant to Sacred Wind, a nonprofit communication company. Sacred Wind then developed and implemented the E-commerce business center, which is designed to allow Navajo artists to expand their business. The website www.navajoarts-crafts.com allows Navajo artists to market their artwork throughout the world. Since coming online, the E-commerce center has seen a steady growth in the sales of Navajo jewelry, rugs, beadwork, and other works of art. We did a lot of selling special earrings and bracelets. We sold a lot of those and from the beginning, we sold a lot of rugs. And then after Christmas, it kind of slowed down, but it's picking back up now. I got more people coming in, dropping their stuff, you know. For example, we had one lady that came in with a pictorial rug. She wanted only $100,000 for it and I told her we could get it more

if she could just wait seven days. So she was kind of hesitant, but she left it with us and put it on internet. And four days later, we sold it for $300. So it was the double deposit. One of the artists who's taken advantage of the E-commerce center is Ruth Shefford. She's a self-taught bead artist who's been perfecting her work for the last ten years. In the past, Ruth has sold her artwork directly to people at flea markets and by word of mouth. But her method of doing business has changed since the inception of the E-commerce center. Technology now allows her to sell more of her work to many more people across the nation. It really does help. And of course, you know, my source of income is not enough. And my daughter lives with me, my two grandkids, and of course my husband, he's not working, and he does assist in the bead work like that Hatchet right there. And it really does help

economically because the cost of the economy is shooting up so sky high, and I rarely sell them going anywhere. And I don't have to go pedally to the places. But surprised me when I first got with it, got a few of my items. And then on top of that, too, I thought, oh, maybe because Christmas is rolling. It's right around the corner. For that reason, I thought maybe that's what brought in the money. But I feel good because I can put my stuff on eBay and then just be at home. And then it makes me want to do more. And then it makes me want to do expose more of my artwork. And I want to advance myself, and I want people to know that, you know, there's little little shepherds hiding in the corner doing their bead work, you know. And it's really, it's exciting.

One of the amazing resource for those people. That is a really great story. You know, before we go, I also understand you have another announcement about another funding opportunity offered by you folks. Yeah, this is a program I said we can't do much in ag production. This is one where we can. We call it the value added producer grant program. And we can provide up to $100,000 in planning money and up to $300,000 in working capital to help you figure out how to get more of the consumer's dollars. Here's the example. We won't help you put your peanuts into the ground or get them out. We'll help you turn them into peanut butter so that you've added value to the product that you're already growing. Chili's into salsa is another example. Now we have a really quick turnaround on this. A deadline of March 31st for the application. So you need to start talking to us right now. If this is something you're interested in doing, and you can contact our state office at 505-761-4950 and begin to talk this bank through,

help us get an application done, get it in and get it funded. Awesome, Ryan. See you next month. Thanks so much. Thank you. It's time again for our weekly piece here on Mining Your Business. Showcase is some of the hardworking entrepreneurs and business people in our area. We call it the Greater Los Cruces Chamber of Commerce, Local Business Feature. Our store has had a long history. We started in October of 1981, and so that is 26 years, if you do the math, and my sister and I started the business together. And so it's always been a family business. We had this dream of doing something very unique, very different, very special in Los Cruces. And thank the good Lord. We've done it for all this many years because we've enjoyed

it so much. And my sister and I continued the business until about five years ago together. And then she retired rightfully so. She deserved it. She worked very hard. And my daughter, Kelly, is now my partner in the business. What we're looking at here is a designer line called Joseph Ripcoff. This is a company from Canada that we have carried for a really long time. And one of their really strong points is black and white. Black and white is a definite classic for any woman to have in her wardrobe. And he does it the best. It's absolutely washable and packable. Here we have one of our most outstanding lines and that's double d ranch wear. What they do as a tradition of theirs is they do wonderful embellished leathers and suites. But when we're getting into the spring and summer months, what's really exciting is they do the same kind of detail but on a t-shirt. So we can wear it in our hot weather and it's about an eighth of the price.

When we're out on a buying trip, the interesting thing is that we always need to keep in mind the lady that we're shopping for. I'm 28 years old. Everything that I wear is from here in the store. But also I'm keeping an eye out for my 80 to 85 year old customer who's been with us for so many years. They've been there all the time from the beginning. And so I still need to keep them satisfied. And as well as bringing in new customers, you know, women my age and a little bit older. Women who want to look nice and women who are either are professional or they have places to go. This outfit is one of the best outfits that we can feature for our summer wearing. We have linen, comfortable, cute, where to the grocery store. And here we have an arm cover which is a nice thin sweater that ladies can throw on over most anything and pop it out with a really colorful piece of jewelry. This product is a really new and interesting product for the Emerald Isle. It's called One Soul Shoes and this is where you buy the sole of the shoe and then you're able

to snap on the different toppers to coordinate with what you're wearing that day. The different flavors that we have in the Emerald Isle are infinite because we really have kind of a melting pot of clothing. I would like to say that virtually any woman that would come into the store could come in and find something just wonderful and they can find something that suits their taste, something that hopefully fits them in their size and that they can walk out of here feeling like a million dollars. I have to have this. You ladies have perfection. Seven years ago we decided to relocate to the Mercado de Mesea. When you're driving into Mesea before you reach the square, there's a road called Calier de Mercado and when you take a left onto that you are opening yourself up to a whole new world of shopping experience including the Emerald Isle. It's just been wonderful for us to have this attitude of family. We love what we do. That just about does it for this week. If you have a question or comment about the show,

you can call the mind in your business hotline at 646-7350 or email me at Charles Comer at Yahoo.com. Again, I'd like to thank my guest, USDA World Development's New Mexico director, Ryan Gleason for coming on the show and thank you so much for watching. I'm Charles Comer. Here's hoping you have a great one. Minding your business is provided by support from CEO Levitino of Emerald Realtors, proud to be associated with the quality programs and community service projects of PBS and KRWG TV. By Camino Real Builders, a committed partner with KRWG Broadcasting, providing educational,

informative and entertaining programs to our region. And by the New Mexico Humanities Council, working with local groups to bring programs about culture and the human experience to all communities in New Mexico. It's a public television program and CEO Levitino, Realtor of Emerald Real Estate, who is proud to be associated with the quality programs and community service projects of PBS and KRWG TV.