BEDC moves to help struggling businesses
The Bermuda Economic Development Corporation has announced a series of measures designed to help small and medium-sized businesses deal with the economic impact of the Covid-19 pandemic.
The organisation has reallocated budgeted funds and modified its existing products and services for a nine-month period in order to support and stimulate local businesses, the organisation said.
Measures include increases in the funding available for direct lending, loan guarantees, and micro-loans, as well as a range of other initiatives.
Funds will be allocated to provide support to general business owners, existing clients who have BEDC products, and new entrepreneurs seeking support.
In addition to the support and stimulus package, the BEDC said it will work with the Ministry of Finance and other government departments to determine what other relief can be provided to support business owners during the pandemic.
Erica Smith, executive director of the BEDC, said: “Thanks to the support of BEDC's chair and board of directors, we feel the amendments that we have put forth are in the best interest of the business community in Bermuda. We can see the impact this pandemic is having on local entrepreneurs in the community and it is our duty to use what we can to support those that need it the most at this time.”
She added: “We are all being impacted by the effects that the Covid-19 virus is having on the community, but we know if we are to return to any sense of normalcy in the future we must support the backbone of our local economy, our local businesses.
“We anticipate that we will get an influx of calls based on feedback we have received to date and we are making arrangements to do what is needed internally to be able to facilitate an influx of requests.”
Interested business owners should contact the BEDC directly by calling 292-5570 or emailing firstname.lastname@example.org.
The BEDC invites business owners to take its Bermuda SME Covid-19 Business Survey to provide feedback and insight into the needs and challenges of their business. The survey can be found at https://www.surveymonkey.com/r/N8G99D2. Additional information can also be found at www.bedc.bm.
The BEDC said its staff, although working at home, are contactable through e-mail, telephone, or web conferencing. All BEDC operations are functional with regards to receiving and processing applications and providing business advice, the organisation said.
General BEDC support measures taken include:
1, Reallocation of $350,000 from its existing operations/programmes to its capital budget to increase its capitalisation to $2 million. This will allow an increase to $1 million in direct lending (tied to point 7 below). Based on current loans in repayment mode, BEDC will have more than $500,000 to assist with direct lending, the organisation said. There will also be an increase to $12 million for issuing loan guarantees for bank financing (tied to point 10 below).
2, Reallocation of $100,000 from its existing budget to provide businesses with access to external expertise support in accounting, legal, and marketing services (supplementing BEDC's support and expertise) to assist in right-sizing business once Covid-19 passes.
3, Facilitating the creation of an ideas pool where businesses can write in with recommendations and suggestions of how public authorities and departments can assist.
4, Amending its payment terms to pay all its vendors on a weekly basis to facilitate better cash flow.
5, Acting as an intermediary connecting consumers/buyers with sellers as businesses will have underused inventory.
6, Facilitating businesses in forming partnerships, merging, sharing overhead, etc. with other businesses to reduce operating costs, both during and once Covid-19 passes.
For existing and new financial applications/clients of BEDC, the organisation will:
7, Increase its microloan offering from $20,000 to a maximum of $30,000 per business with no security required. Interest rates for new microloan clients to be reduced to 3 per cent and 3.5 per cent for EEZ and non-EEZ businesses, respectively. Microloans can be used for both capital and working capital purposes.
8, Give new and existing microloan clients the option to structure/restructure their loans for three to six months interest-only repayment periods based on need then followed by principal and interest payments.
9, Give existing microloan clients the option to extend their loan repayment terms, which are currently nine to 24 months, to up to 42 months.
10, Guarantee up to 75 per cent, increased from 65 per cent, of a bank loan up to a maximum of $300,000.
11, BEDC's guarantee will now be applied, for the first time, against lending from other entities, including individuals, private entities, credit union, or companies, as long as KYC/AML requirements are met.
12, Reduce application fees by 50 per cent for all products with the exception of vending licences.
13, Reduce loan guarantee fees by 50 per cent.
14, Absorb the cost for credit checks thereby eliminating the fee for clients.
15, Give entrepreneurs that operate seasonal businesses the option to have recurring interest-only periods for the life of their microloans.
16, Give recipients of new approved microloans the option to delay the first repayment date by two months.
17, Increase the maximum credit line it will guarantee for its letter of credit product for retailers from $10,000 to $12,500. BEDC will be working with the customs department on other amendments with the programme to assist retailers, the organisation said.
BEDC said its quarterly seminars, once reinstated, will be offered free to all business owners and entrepreneurs who register, while registration fees for all BEDC multi-week courses will be reduced by 50 per cent.