Small businesses praise credit initiative
Owners of small businesses have welcomed an initiative that will allow them to claim credit when importing items for sale.
“I definitely hope to take advantage of it,” said Jahnika Alves, who owns Clear Choice Doors, Windows and Glass with her husband, Herbie Alves. “It’s a really great idea.”
Mrs Alves said any policy that would make operating a small business easier would be beneficial to Bermuda.
This week, the Bermuda Economic Development Corporation and HM Customs announced a new partnership, allocating $200,000 in funds annually to be claimed by small firms — assisting them when importing goods for sale. Starting on September 1, the programme will allow businesses to apply for a maximum of $10,000.
Michael Heslop, owner of the Smoke Shop in Washington Mall, said the move was a good idea because financing could often be the hardest part for young entrepreneurs.
Although his shop, which opened in 2013, is now well established, he said: “If they’d had that a few years ago I would definitely have used it. I think it’s an awesome idea.”
Mrs Alves said the line of credit would “really help you to manage your cash flow, which is the lifeblood for a small business”.
She said that having to pay the duty on goods upfront could be hurtful to a small business because “that’s cash you have to have to hand for that use”.
“For small businesses, it’s important to know and understand the financial products that are available,” she added.
According to Gavin Kennedy, the owner of the Hub, a cellphone shop in Warwick, the initiative “definitely can help small businesses start up” by assisting with the purchasing of inventory, for example.
Although Mr Kennedy prefers to pay his bills upfront, he said: “It is a good deal for businesses that are eligible for it.”
Sharon Bartram, owner of 27th Century Boutique, added: “They used to do it years ago. It helps. In certain situations, if you have a quantity of different shipments at once, it does help your cash flow.”
But she said it could also cause problems if bills are not paid upfront and business owners found themselves in a position where they were not able to pay the duty at a later date.
Erica Smith, the executive director of the BEDC, said this was a valid concern, but added: “We’ll give you a line of credit based on your ability to pay it back.
“We’re going to work with the businesses to ensure it’s a product that they can take advantage of.”
Ms Smith said HM Customs had been offering to defer payments for small businesses since 2009, but businesses often could not take advantage of this because they were not able to secure a line of credit. She said that, through this partnership, businesses did not have to secure that line of credit with cash.
“BEDC will secure that line of credit that customs is going to open up for that business,” she said, adding this should help businesses to bring more products to the market quicker, resulting in some savings for consumers and opening up cash flow for small businesses.
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