Capital: Paying for growth
Sunday, May 22, 2011
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If businesses can’t borrow the cash they need to grow and to hire workers, it won’t matter how much training or education people receive.
The problem for would-be entrepreneurs, however, is how to obtain those initial dollars to get off the ground. Until the ripple effects from the recession become fewer, credit’s going to remain tight, said Chris Butler, senior vice president and trust officer for Vancouver-based Riverview Asset Management Corp.
Banks have become more conservative about lending, which means entrepreneurs are going to need to get more creative than they ever have before.
When they do find their way to financing, business startups would do well to follow the example of Vancouver-based Columbia Vista: Diversify, and don’t get caught flat-footed. Columbia Vista’s revenue has grown, and the sawmill has added workers. That business plan it wrote so long ago is working.
“We have banks calling us all the time,” said Bob Lewis, company president. “If you’re perceived as a good risk,” he added, bankers will see fit to issue loans.
However, Clark County’s recovery will depend on more than local businesses finding creative ways to obtain capital, Butler said. Outside companies will play a significant role, too.
For example, the nonprofit health care system PeaceHealth, with $1.3 billion in revenues, is moving its headquarters to Vancouver as it solidifies its new role as the parent of Southwest Washington Medical Center.
PeaceHealth’s move will bring 340 jobs to the area by 2014, and up to 400 more by the end of the decade. “That’s outside capital coming in,” Butler said. “Even though its outside capital, it brings the jobs.”
Scott Bailey, regional labor economist for the state Employment Security Department, said regional public works projects would also inject cash into the economy, spur demand for goods and services, and create jobs.
One of those projects is the Port of Vancouver’s $150 million rail expansion, planned for completion by 2017. The port is pursuing a $76 million loan from the federal government to help finish the work. Port officials forecast that the freight rail initiative will create about 4,000 temporary jobs during construction.
The region’s other significant public works proposal is to build a new, $3.6 billion Interstate 5 bridge across the Columbia River. Construction of that project, which faces significant political hurdles, is estimated to create at least 12,000 jobs — though groundbreaking wouldn’t occur until 2013 at the earliest.