Mr. Colin Dore, Permanent Secretary in the Ministry of Finance in the Nevis Island Administration (NIA), said 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 while speaking with the Department of Information on Dec. 30,
Mr. Dore made the announcement 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 relending project through SEDU for start-up or small business expansion to women and to men 35 and younger, a sector underserved by commercial banks.
“We will start accepting applications by Jan. 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 counselling 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,” he said.“So, all of this counselling process takes place first, before the funds are disbursed, but we start accepting applications Jan. 15 at the office of SEDU which is located upstairs the [Nevis Cooperative] Credit Union Building.”
According to Mr. Dore, the interest rate for the loans will be kept manageable to make it easier for clients to make repayments on time.
“We are looking at an interest rate about 4 percent to onlend to you, the businesspersons, because we have to ensure that you are not overly burdened at the beginning with debt servicing,” he said.“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 honour your repayment of the loans when they become due.”
So far, the NIA has drawn down 50 percent of the total amount and expects the machinery will be in place for SEDU to begin accepting applications by the 15th.Mr. Dore told prospective applicants they should come prepared with 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,” he explained.“I think it is important that we make that clear, so we don’t have people showing up just looking for $100,000 cheque … 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.”
The permanent secretary also explained having a business bank account is 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 cheque out to you,” he said.“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.”
Mr. Dore noted over the years the NIA has supported the small business sector as the main engine of the economy and recognized financing was one of the main challenges facing the sector.