A few years ago, a national business publication listed Salt Lake City as one of the 10 top areas for business growth potential, but recently another publication ranked Salt Lake 56th among the major cities.

R. Kent Moon, Utah district director for the Small Business Administration, attributed the drop to barriers such as the lack of capitalization, the money needed to start businesses and keep them growing.Speaking at the monthly Utah Division of Business and Economic Development update meeting in the State Capitol, Moon said Utah banks have been unjustly criticized for not making more investment money available in the state, but they have certain criteria they must meet.

He said Utah isn't "capital poor" because it has $6 billion within the state, but the critical issue is having the right type of capital available at the right time. Moon said banks traditionally don't lend money to businesses for long periods because the risk is higher.

When a new company wants to expand quickly, a bank loan is difficult to obtain because the business owner doesn't have a "track record" of payments because he hasn't been in business long enough, Moon said.

The resulting "middle market gap" in financing is one of the types of capitalization deficienciesthe state needs to overcome.

To this end, the Salt Lake Area Chamber of Commerce initiated a study to determine if a Small Business Investment Corp. could be formed to provide long-term loans to businesses that need to expand. Although the chamber cannot become involved in the venture by investing money, it is helping raise money for the SBIC, which will be licensed by the SBA.

Several days ago, Moon and members of the SBIC Task Force asked state economic officials for $160,000 to hire a manager, establish an office and start raising money for a fund that officials are hoping will reach $15 million. The request will be funneled to the Utah Economic Development Committee later this month.

Another speaker was Kumen B. Davis, executive director of the Utah Small Business Development Center, who said his agency is focusing on training and counseling operators of small businesses and assisting entrepreneurs.

He said center employees help people write a business plan, prepare for venture capital conferences and provide free accounting services. As a result of the training in the past few years, sales for companies increased after the training, Davis said.

Also speaking was Scott G. Davis, president of the Deseret Certified Development Co., an SBA-licensed organization that puts business projects together with 50 percent of the money from the bank, 40 percent guaranteed by SBA and 10 percent from the owner.

In the last fiscal year, Scott Davis said, DCDC approved 45 loans and now has a total of $20 million in loans in force. Because of that, 1,700 jobs have been retained or created, he said.