The CNMI government unveiled at the Friends of Business Summit last Wednesday a new loan program for small business owners that is also being touted as a means to provide startup capital, support business expansions, and encourage the diversification of the CNMI’s business sector.
Called the “Building Optimism, Opportunities and Stability Together,” or BOOST, the program is project of the Office of the Governor and the Department of Commerce that aims to provide financial assistance to CNMI businesses and non-profit organizations.
The launch of the new program was announced by Gov. Ralph DLG Torres’ chief of staff, Will Castro, Bank of Saipan manager John Arroyo, and Jesus Taisague of the Department of Commerce during Wednesday’s summit luncheon at the Saipan World Resort Ballroom in Susupe.
According to them, the intent of the program is to support the viability of those businesses and the employment opportunities they offer residents of the CNMI, to further the government’s goal of a diverse economy, and to increase the Commonwealth tax base.
For new businesses, this will mean working capital, furniture, fixtures, equipment, inventory, environmental impact assessments, regulatory permits, and operational costs. For existing businesses, this will give them the opportunity to expand. For new industry diversification grants, this will translate to research and development, feasibility studies, plant and equipment, and startup costs.
At the same summit, the Governor’s Council of Economic Advisers shared the results of the 2022 Marianas Business Pride and Small Business Survey, with GCEA committee chair Matthew Deleon Guerrero and Saipan Chamber of Commerce president Joe C. Guerrero presenting the preliminary results and responding to questions from the audience.
The whole survey consisted of twenty-three questions, and responses to the survey came not just from Saipan, but also Tinian and Rota.
Deleon Guerrero noted that one of the highlighted questions in the survey was in response to the age-old perception of how difficult it was to start or run a business in the CNMI, and a whopping 51% answered that it was difficult, while 16% said it was very difficult, 32% answered that it was easy, and only 1% responded that it was very easy. The results show that about two thirds say that starting or running a business in the CNMI is difficult.
“A majority of the respondents say that it’s difficult or very difficult. So this I think is an important measurement to track throughout the year, as much as we can, continuing to ask this question year over year so that we can understand, whether or not we’re improving in the perception of ease when we’re talking about business,” Deleon Guerrero said, adding that this is a “critical baseline point” of gained information that they are happy to have available now, and are open to discuss.
“It’s really exciting to hear that this is going to be an annual event, hopefully we can use some of this data as, not just establishing a baseline of where we are today, validating some of these perceptions about small businesses that exist, but also being able to track it over time,” said Deleon Guerrero, who chairs the Fiscal Economic Diversification Committee of the GCEA.
The survey also showed that the largest concern among CNMI business owners, for both short term and long term, was the cost of doing business in the CNMI.
Other concerns, besides of cost of doing business in the CNMI, were short term concerns of finding suitable workspace, expanding to new markets, and long-term concerns such as recruiting or retaining an appropriate workforce, and dealing with income volatility.
Deleon Guerrero also noted several other highlighted information retrieved from the survey. One was the annual revenue for a majority of small businesses in the CNMI was less than $50,000 in 2021, and a majority of small businesses in the CNMI did not receive any financial assistance to start their businesses. The largest single reason respondents gave when asked about the challenges to obtain finances was the limited knowledge of all the financing options available.
Of the businesses that participated in the survey, seven were green card holders, 67 were non-U.S. citizens, and 135 were U.S. citizens, showing a 65% majority of small business owners to be U.S. citizens, with non-U.S. owners at a 32% and green card holders the least at 3%.
With businesses operating in various sectors, the largest number of small businesses is in retail , which was at 17% in the survey. Vectors such as professional services and restaurants/bars both contributed 11% each as small businesses. Hospitality and tourism was at a 10%; media was the lowest at 1%.
The largest among the businesses surveyed have been in operation for over 10 years.
The survey was one conducted by the Governor’s Council of Economic Advisers under the Small Business Retention and Development Planning Committee, and was done in collaboration with the Saipan Chamber of Commerce, and the CNMI Small Business Development Center Network.
Guerrero said extra effort was put into the survey, and he also met with many ethnic organizations like the United Filipino Organization, the Korean Community Organization, and the Chinese Community Association. “We need to get these ethnic organizations involved. They are a part of our community, so we include them starting today.” …Hopefully this would be just one of other surveys that we’ll be taking and sharing the information with the community,” said Guerrero
Other presenters at the summit were the CNMI Small Business Development Center Network, Saipan Chamber of Commerce, the CNMI Bureau of Military Affairs Economic Development Program, the Commonwealth Zoning Board, the CNMI Department of Labor, the CNMI Department of Commerce, the Commonwealth Economic Development Authority, and the Office of the Governor.