Bitterroot businesses have access to capital
by JOEL GALLOB - Ravalli Republic
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One of the nation’s several economic worries currently is the general tightening of credit for businesses that need it to start, expand or diversify. But according to a study of the Bitterroot Valley economy, businesses here are not suffering from a lack of access to capital.
The Bitterroot Business Climate study is an ongoing project that now has interviewed 36 business owners around the valley about numerous aspects of the local economy. And one piece of the data jumped out as a surprise.
“The businesses have actually said that their access to capital has improved in 2008. Not by a lot,” Bitterroot Expansion and Retention (BEAR) study member and Ravalli County Economic Development Authority Executive Director Julie Foster wrote in an e-mail to the Ravalli Republic.
In an earlier stage of the ongoing BEAR research, from March 1, 2007 through Dec. 31, 2007 which had a sample of 14 Ravalli County businesses, only 14 percent (two businesses) said their access to capital was excellent, and 50 percent (seven) said it was good. In that survey, seven percent (one business) said capital access was fair, and 21 percent (three) said it was poor. Put another way, 64 percent of the respondents then said their access to capital was good or excellent.
For the period Jan. 1, 2008 through July 28, 2008, during which 20 business owners were interviewed, 25 percent (five businesses) said their access to capital was excellent, and 55 percent (11 businesses) called it good - for a total of 80 percent saying capital access in the Bitterroot this year is excellent or good.
Further, in the lowest category, three Ravalli County respondents in the 2007 sample said their capital access was poor, while in the 2008 sample, no respondents said their ability to access needed monies was poor.
The BEAR Team also compared the responses they received to responses in parallel studies in Missoula and Lake counties. There was data available from other counties, too, said Foster, but Missoula County was the first and clearest choice for a comparison to Ravalli, and Lake County is the next heading north from Missoula, while the counties to Ravalli’s east, Granite and Deer Lodge, are much more rural than Ravalli County.
When the 2007 numbers and the 2008 numbers were put together, 20 percent of the Ravalli County businesses interviewed said they have excellent capital access and 51 percent reported good access. That compared to just 14 percent excellent and 36 percent good in Missoula County, but was below the figures for Lake County, where the respondent figures were 29 percent excellent and 57 percent good.
“Some of the national workshops I attend are full of economic developers saying that their lenders don’t understand economic development and that is a real barrier to entrepreneurship,” Foster stated. “I feel very fortunate to know that in Ravalli County we can always call on the local lenders to help figure out how to help a business get access to capital - that may mean bringing in several sources, grants, low interest loans or guarantees from someone like the USDA or Montana Department of Commerce or the Ravalli County Economic Development Authority’s Revolving Loan Fund.”
According to the interviewers’ notation of business owners’ responses, a big concern is the absence of affordable housing. The notes include comments like, “Housing often is not affordable compared to the wages in the Bitterroot,” and that it is “often expensive, of good quality and well beyond the reach for the average wage earner in Ravalli County.” Another noted, “There is good availability but the challenge is the high costs of real estate (and) rentals.”
In terms of hourly wages, the skilled/professional average in this county and in Missoula County was the same, $17 per hour. It was slightly less, $15 per hour, in Lake County.
For semi-skilled workers, the figure was $11 per hour in both Ravalli and Lake counties, and $12 per hour in Missoula.
For entry level workers, the Ravalli average was $8 per hour. The figure was $1 per hour higher in Missoula County and $1 per hour lower in Lake County.
The interviewed Ravalli employers came out way ahead in the benefits they provide employees.
According to the study, 82 percent provide health insurance, compared to 56 percent in Missoula and 57 percent in Lake County; 94 percent provide paid vacation, compared to 78 percent in Missoula and 86 percent in Lake; 64 percent provide sick leave, compared to 44 percent and 43 percent in those other two counties; and 61 percent provide educational opportunities, versus 44 and 43 percent.
There was only one category of employee benefit where Ravalli employers did not surpass their compatriots in both Missoula and Lake counties. That was the provision of a 401K retirement plan. In Ravalli County, 36 percent of the interviewed employers provided such a plan, placing them ahead of Missoula County’s 33 percent figure, but behind the 43 percent figure in Lake County.
The members of the BEAR Team include the Bitterroot Chamber of Commerce, the Bitterroot Job Service, the Bitterroot Star, the City of Hamilton, Farmers State Bank, Ravalli County Economic Development Authority, the Stevensville Main Street Association and Northwestern Energy.
Reporter Joel Gallob can be reached at 363-3300 or jgallob@ravallirepublic.com
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