Colin Dore – Announces Business Loan News
January 06, 2020
Mr. Colin Dore, Permanent Secretary in the Ministry of Finance in the Nevis Island Administration (NIA) says the Small Enterprise Development Unit (SEDU) will begin to accept applications to access loans for small business development or expansion and the requisite training in about two weeks.
The Ministry of Finance official made the disclosure while speaking with the Department of Information on December 30, 2019, following a signing ceremony between the NIA and the Republic of China (Taiwan), who has agreed to provide a loan of EC$5million to facilitate the re-lending project through SEDU for start-up or small business expansion to women and to men 35 and younger, a sector under served by commercial banks.
“We will start accepting applications by January 15. We may not be in a position to disburse because of course disbursing of the funds would depend on us having the mechanism in place and also having the access to financing but even before we start disbursing, it is important that we have some business counselng with the potential applicants because they need to understand the requirements as a business person, understand their obligation for things like payment of taxes, and also understand the obligation to repay the fund.
“So all of this counseling process takes place first before the funds are disbursed but we start accepting applications January 15 at the office of SEDU which is located upstairs the [Nevis Cooperative] Credit Union Building,” he said.
According to Mr. Dore, the interest rate for the loans will be manageable making it easier for clients to make repayments on time.
“We are looking at an interest rate about 4 percent to lend to you the business persons because we have to ensure that you are not overly burdened at the beginning with debt servicing.
“That’s why we say we need to take it seriously because it is a loan. Even if it’s only 4 percent we expect you to take it seriously and to honor your repayment of the loans when they become due,” he said.
So far the NIA has drawn down 50 percent of the total amount and the machinery will be in place for SEDU to begin accepting applications by the planned commencement date.
Meantime, Mr. Dore told prospective applicants they should come prepared with the relevant supporting documents to bolster their applications, stressing that the amounts that would be given would be based on the soundness of their application.
“We will fund based on the scope of your project or just knowing that if it’s a very large project that can go up to $100,000 then of course once you have the documents to show, the project proposal, the project idea good enough, sound enough to match the $100,000 we will reach there.
“If your project proposal is only $20,000 in the first phase then of course we will fund $20,000 and as you grow and develop we will add the additional funding as you go along. So I think it is important that we make that clear so we don’t have people showing up just looking for $100,000 check and again you must come with a proper business idea and not just come accessing funding because funds are available, and it must go toward the business,” he said.
The permanent secretary pointed to a key requirement for those who will be applying for the loans.
“One of the requirements which would be quite important in all of this is you must open a business bank account. The funding which we provide in most cases we will make the payment directly to the providers of your start-up goods and services. In very remote cases we will actually make the check out to you.
“So having come to the office, filled the application form, our business counseling officers having gone through the proposal with you, looked at where your initial expenditure would be, we will make the payment directly to your suppliers so we expect you to bring the invoices, bring the contracts and bring all the other documents to support the payment. We will not be giving you a cheque of $100,000 to walk away with in any case. So we want to make that abundantly clear to everyone who is seeking to come forward seeking financing under this project arrangement,” he said.
Mr. Dore noted that over the years the NIA has been pushing the small business sector as the main engine of the economy and over the years has realized that challenges of financing was one of the main issues facing the sector.