Small Business Owner receives loan for start-up capital, growth
July 24, 2015
Small Business Owner receives loan for start-up capital, growth
GGEDC & partners aid start-up of economic base business
Gallup, NM – Roger Montano worked as a corrosion technician for more than 7 years with El Paso Natural Gas / Kinder Morgan, and while he liked his job, he wanted his own business.
“I always knew I wanted to have my own energy specialty service oriented business,” Roger said. “I just didn’t have a clue as to how I was going to secure start-up capital.”
Roger found help at the Greater Gallup Economic Development Corporation in Gallup and funding through Pinnacle Bank and the New Mexico Finance Authority to make his vision of owning an energy specialty service oriented company reality. “Gallup Pipeline and Compliance Services primary customers will consist of but not limited to mid-stream natural gas transmission energy companies with existing and aging energy assets in need of excavation for the purpose of protection, inspection and repair as well as the installation of a wide variety to new utility assets,” Roger said.
In January 2015, Roger met GGEDC Executive Director Patty Lundstrom during Gallup-McKinley County Day at the NM Legislature.
Roger contacted the Greater Gallup Economic Development Corporation staff, who happened to be looking for local entrepreneurs seeking to create economic base companies in the area and they helped him identify resources to help get the business operating.
Opening an energy specialty service oriented business daunted Roger. Only a handful of independent energy specialty service oriented businesses operate in the Southwestern U.S., let along in New Mexico.
The fears subsided with guidance from the Greater Gallup Economic Development Corporation who helped Roger revise his business plan and financial models for the new business, and develop a loan package. According to Patty Lundstrom, Executive Director of the GGEDC, “The GGEDC was able to step in and provide just the right help at just the right time, and that was key to making the project a success.”
In June 2015, with NMFA’s participation through their Collateral Loan Support Participation program, a loan was approved through Pinnacle Bank totaling almost $200,000.
Mark Horn of Pinnacle Bank worked with Roger to acquire a business loan. He knew Roger had the practical experience to operate an energy specialty service oriented business but had to consider the added responsibility of managing the business, ordering materials, marketing and supervising employees when approving the loan.
“With the help of the GGEDC working with Roger to strengthen the business plan and the NMFA’s purchase of a portion of the loan Pinnacle Bank was able to approve the loan overcoming all the perceived risks associated with lending to a start-up business,” Horn said.
The Gallup Pipeline & Compliance Services project is important to the Greater Gallup Economic Development Corporation and the Gallup-McKinley County area specifically because McKinley County has the third highest unemployment rate and lowest per capita income, at 9.5% and $24,383 respectively, of all 33 counties in New Mexico. Taken as a whole, McKinley County has the highest poverty rate in the state at 40.3%.
Gallup Pipeline and Compliance Services represent an opportunity to create wealth generating economic-base jobs for the Gallup-McKinley County area, with the potential for 20 to 35 high paying jobs. Within the McKinley County, the average wage in the utility sector paid by companies similar to Gallup Pipeline and Compliance Services is approximately $68,460 – ranking 6th highest of all 33 counties in New Mexico.
Gallup Pipeline and Compliance Services will play an integral part in maintaining the pipeline infrastructure of the oil/gas industry in New Mexico, an industry which is responsible for generating 31% of the general fund revenues for the state of New Mexico. With 570 miles of pipelines in the Gallup-McKinley County area and approximately 1,500 miles of pipeline stretching from Arizona to Texas, industry compliance with the federal Pipeline Safety and Hazardous Materials Safety Administration will generate significant and long term demand for repair of existing pipeline infrastructure assets not including new installations.
