Less red tape on loans for entrepreneurs
Entrepreneurs looking for loans could have less red tape to overcome after a partnership between the Bermuda Economic Development Corporation and the Bermuda Credit Union was announced yesterday.
David Burt, the Premier, said that the link-up would help people who might otherwise have been unable to secure finance for their business plans.
He said: “As a result of the coronavirus pandemic, the Government of Bermuda made funds available to the BEDC to set up the Covid-19 Business Sustainability and Continuity Funding Programme to provide additional financial support to assist Bermuda's small and medium-sized businesses.
“To date, because of the funding provided by this Government, the BEDC is able to answer requests for support in excess of $4 million.”
Mr Burt added that the organisation — through its partnership with the Credit Union — “proactively offered a solution” to tackle the problem of some entrepreneurs had getting a bank loan.
He explained: “Traditionally, the Bermuda Economic Development Corporation has provided loan guarantees to local banks in Bermuda, acting as a guarantor for entrepreneurs with no other form of collateral.
“The first modification of the loan guarantee programme was to increase the guaranteed amount from 50 per cent to 75 per cent. “This alone was a significant development because it allowed those deemed higher risk entrepreneurs to have a chance to get the financing required.
“The next modification will enable entrepreneurs to access these funds in a more efficient manner, streamlining the guarantee process.
“Previously, entrepreneurs had to go to the BEDC and to the financial institution.”
But Mr Burt said: “Now, as the Credit Union and the BEDC have agreed underwriting terms, the entrepreneur in need of funding need only to go to the Credit Union and, if they meet the criteria, the BEDC will automatically guarantee a portion of the loan.
“Hundreds of business owners over the years have been supported by the guarantee programme and have gained access to millions of dollars of funding and the BEDC continues to work to make their programmes more accessible.”
Mr Burt added: “Through this new partnership with the Bermuda Credit Union, the BEDC has further extended its remit to support those entrepreneurs who may not have been able to get traditional financing from Bermuda's local banks.
“This partnership is a further example of how the BEDC leverages its existing products to create new opportunities for Bermuda's business owners.
“This new partnership with the BEDC will allow the Credit Union to continue to abide by their philosophy of going ‘above and beyond' for their members and exercising the Bermuda Credit Union mantra: ‘We do take care'.”
Ray Jones, the BEDC acting executive director and its finance director, said: “For the BEDC to be able to provide guarantees on loans to the members of the Bermuda Credit Union is a great opportunity to service entrepreneurs who may have historically not been able to get financial support.
“Since we launched this expanded guarantee offering, we are already working with three entrepreneurs of which one has already been approved.”
Mr Jones said that $500,000 had been earmarked to support loan guarantees for the Credit Union.
He added that businesses in the Economic Empowerment Zones as well as current and former BEDC bank guarantee clients would be given preference.
Businesses must be registered with the BEDC and be, or become, a Bermuda Credit Union Member.
Graham Nesbitt, of the Bermuda Credit Union, said: “When this programme came up that the Government was offering, we took the opportunity ... one of our main goals is to stimulate the economy, so during this downtime it was the opportune time for us to say ‘yes, let's partner with the BEDC'.”
He added: “We will continue working with businesses and other organisations that want to help to stimulate this economy but we are here to take care of our people.”
• Anyone interested in the programme should contact the BEDC on 292-5570 or by e-mail at email@example.com. For more information visit www.bedc.bm
• To read Ray Jones's remarks in full, click on the PDF under “Related Media”