The government hopes to be in a position to begin facilitating that $20 million loan for small businesses impacted by the outbreak of COVID-19 as early as next week, with a turnaround for approval taking place in as little as four days, Financial Secretary Marlon Johnson said yesterday.
Johnson said while some critical details still need to be finalized, the eligibility range right now is for businesses that have a turnover of up to $3 million per year; and the loan facility would likely be in a range between $5,000 and up to $300,000.
“The rationale is that if you’re bigger than that you should have a relationship with the bank and the bank can help you,” he said.
“This is to cater to that small business segment in the market that struggles to get bank financing. They’ll have to produce a business license and some financials but we’re trying to make this streamlined and expedited so you’ll have to demonstrate that you have a business license, you’ve done a filing before or you have a VAT (value-added tax) filing.
“And we’re inviting all of the commercial banks and financial institutions to participate, so even though this will be a government loan it will be administered through the banks and try to keep the interest rates as affordable as possible.
“We hope to get this up by the end of next week and we hope that there shouldn’t be more than a three to four-day turnaround time between completed application and you being able to get your first tranche of money. We are unlikely to pay an entire loan. So, let’s say you get a loan for $20,000 you may get it in two increments or three increments.”
Deputy Prime Minister and Minister of Finance Peter Turnquest announced on Wednesday that government was committing $20 million – $10 million coming from the extinguished dormant account fund – for short term loans to support small businesses impacted by the deadly virus.
He said eligibility would include confirming that the business has been in existence for over one year, a commitment to retain most of the existing staff complement and a plan to utilize the loan to ensure business continuity.
“The first priority is that you have to demonstrate that you are prepared to keep the majority of your staff,” he said.
“Anything over 50 percent. The more the better. You have to be able to show you are paying the rent, you’re dealing with basic supplies and utilities.
“If the government is going to fund you as a business owner for business continuity, we want you to at least give consideration to keeping most of your staff on, because the beneficiary of the government assistance really ought to be people as opposed to businesses if you get the connotation. So, keeping businesses afloat is important but keeping people employed is even more important,” Johnson said.
“So, the government is saying we understand you may have to scale back some people, may have to let go and there are some mechanism that can support them. But this is for the person who says I don’t think my business is going to go under but I realize the nature of my business is that for the next three months pockets and cupboards will be barren and I don’t want to rundown all of my personal resources, so I know when the tourists come back I’ll be okay. This is for that kind of person. This wouldn’t really apply to somebody whose business is already on a lifeline. This is for people who truly are going through an inadvertent business interruption.”