Applications poured into the Small Business Development Center’s Access Accelerator yesterday morning as companies adversely impacted by the global outbreak of COVID-19 seek a piece of $20 million government has allocated to help businesses stay afloat during this uncertain time.
While she couldn’t provide an exact number on how many businesses stand to benefit from this initiative, SBDC Executive Director Davinia Grant said yesterday that she expects there to be a significant demand for the loan and that the entire facility would be exhausted.
“The applications are already coming in,” she said.
“So, persons were, obviously, already prepared and had their documents in place. We’ll be able to do a weekly reporting on how many people are accessing through this program.
“We expect to use the entire $20 million. The first 10 will go in the first month in our expectation and then in the third month, we’ll do a second disbursement for the loans that were already approved.”
Yesterday was the first day of applications for the government’s Business Continuity Program, which allows micro-, small- and medium-sized enterprises (MSMEs) that have been in operation for longer than one year and earn less than $3 million in revenue and have less than 50 employees, to apply for a low interest rate loan (five percent) for working capital to help overcome the temporary loss of revenue as a result of the pandemic.
The maximum loan amount would be tied to the last filings of a business’ value added tax returns or business license filing.
For example, a company with gross sales between zero and $100,000, would be eligible for a $5,000 monthly loan payout, which would amount to a total payout of $20,000 over the course of the four months the program is in effect.
This is tiered up to a total maximum loan amount of $300,000 over the course of the program.
Businesses have five years to repay the loan.
“What the government is trying to do through this program is to have businesses access $20 million in short-term, five-year loans to get them through practically the next four months and, if necessary, we’ll review the program in four months if the situation requires anything further,” Grant said.
“The $20 million is to help companies with their salaries, rent, utilities, insurances – which are critical, you really don’t want them to lapse at this – and also to some extent, inventory and supplies.”
Grant said the idea behind the program is that during the four months, you won’t have to make any payments and after the four months, the five-year term will kick in with the financial institutions that are facilitating the loans on behalf of the government.
Those institutions are the Bahamas Development Bank, Bahamas Entrepreneurial Venture Fund, Cash and Go, Fidelity Bank (Bahamas), Leno Corporate Services, Omni Financial Group and Simplified Lending.