Good morning, I am delighted, as the Minister of Economic Development and Tourism, to join with the Bermuda Economic Development Corporation (BEDC) in sharing some exciting news on TWO (2) recently approved financial initiatives that will help the Island’s local entrepreneurs.
- The first is an increase to the BEDC’s maximum loan guarantee percentage – from 50 percent to 65 percent with a maximum dollar value of $200,000. This addresses a long standing barrier for many entrepreneurs to access bank loans thus closing the gap created by a lack of collateral to secure bank financing. This change allows those with the idea but without the means, to have the opportunity to gain access to capital and fulfill their dream of becoming an entrepreneur.
- Our second new initiative is the BEDC’s Debt Consolidation Micro Loan, to assist entrepreneurs in accessing loan funds to pay off past debt. For years, local entrepreneurs have spoken of the challenges they have experienced in getting the capital needed to start-up, sustain, or grow their local businesses. Bermuda is a costly place to live and do business and without the proper channels of support, some entrepreneurs have been forced to operate below their true potential or even forced to shut down. Our entrepreneurs told us that a Debt Consolidation Micro Loan program would be a tremendous help, allowing them to consolidate small debts, reduce their carrying costs, and thereby increasing business cash flows. The BEDC and the Government have listened and taken action.
This new program will provide assistance to existing businesses by consolidating business back debts between $5,000 and $20,000. In order to be eligible, the back debt must have been accumulated within the last 3 years. Business owners must also have evidence of back debt related payment plans and/or evidence of attempts to repay as best as possible.
This will help business owners improve their credit, rebuild business relationships, and re-establish or grow their businesses. The BEDC has allocated a total of $200,000 to this micro loan product and loans will be offered up to a maximum of $20,000 each.
This product is available to both small and medium businesses island wide, including vendors and those businesses located within the three designated Economic Empowerment Zones.
BEDC’s mission is “to inspire, inform, support, and grow new and existing Bermuda businesses through education, guidance, data provision, advocacy, networking and financing”. While not a bank, BEDC has the legislative authority to act as a guarantor for portions of bank loans for small and medium-sized businesses, which appear viable, and where the credit-worthiness of the borrower is sound.
This Government is committed to increasing opportunities for Bermudian entrepreneurs. That’s why we have committed to increasing BEDC’s funding. The Corporation now has the ability to increase its capitalisation from $1 million to $1.65 million. This means they are currently able to write $9.9 million in loan guarantees up from $6 million, as they can leverage their capitalisation 6 times. It also means BEDC can increase their direct lending total from $500,000 to $825,000.
For the hard working, dedicated entrepreneurs on the Island, your Government has empowered the BEDC to better help you secure financing and sustain your livelihoods. It means you can continue to provide valuable products and services to the community, with the understanding that BEDC and your Government are in your corner.
I commend Erica Smith and the team at the BEDC for their responsiveness to the needs of our entrepreneurs and for their sterling efforts in working with the government to make doing for self a little easier for our people.
At this time, I will turn it over to Chris Maybury, of BEDC’s Board of Directors, to say a few brief remarks.