PLP: we have supported businesses
The Progressive Labour Party yesterday highlighted a package of measures introduced to help workers and business owners weather the economic storm caused by the Covid-19 pandemic.
Jamahl Simmons, the chairman of the Bermuda Economic Development Corporation, said the Government had shown “strong and compassionate leadership” over “perhaps the greatest test our country has faced”.
He added: “Going forward, Bermuda will require strong leadership that not only displays compassion for our people, but also the willingness to take action that will meet the needs of our people.”
Mr Simmons was speaking at Alaska Hall, the PLP Headquarters, on Court Street in Hamilton.
He said that 86 small and medium-sized businesses had been given about $1.91 million — $747,303 of which had been in grants that businesses did not have to repay.
He added that the Government had given entrepreneurs a total of $12 million in additional funding through the BEDC.
Mr Simmons said that the Covid-19 Business Sustainability and Continuity Funding Programme had been allocated $8 million of the cash to offer small businesses grants of up to $30,000 and medium-sized and small businesses direct loans of up to $40,000.
Mr Simmons added that the BEDC increased their “capitalisation” to $2 million, which allowed $1 million to go towards debt consolidation and microloans.
He said that the ceiling for the microloans had been increased to up to $30,000 per business with no security required.
Mr Simmons added: “These have been direct loans from the BEDC without any bank involvement and have enabled businesses to obtain working capital and limited capital purposes with a focus on immediate overhead needs such as payroll, rent, utilities, insurance and other fees.”
Microloan clients were given the option to restructure their loans to interest-only repayment periods for three to six months, based on need.
They were also given the chance to extend their loan repayment terms to 42 months, which reduced their monthly payment amounts once they reached the “principal and interest” phase of their loan.
Businesses with new microloans were given the option to delay their first repayment by three months.
Entrepreneurs of seasonal businesses were also allowed “recurring interest-only periods” for the length of their microloans.
Mr Simmons said that the BEDC acted as an “intermediary” to connect consumers with businesses with underused inventory.
He added that corporation had helped businesses merge or form partnerships to help reduce operating costs.
The BEDC was given $12 million to issue loan guarantees to businesses who worked with banks and other financial institutions.
Mr Simmons said that they provided as much as 75 per cent of collateral for a bank loan and a maximum guarantee of $300,000 for Bermudian financial institutions — ten per cent more than before the pandemic.
He added that the guarantees could be used against loans from the Bermuda Credit Union for the first time and that $500,000 had been given to the co-operative for preapproved guarantees.
Mr Simmons said that the BEDC also used $100,000 to allow businesses to hire outside expertise in accountancy, legal and marketing services “to assist in transitioning these businesses into the new normal”.
He added that interest rates and fees for applications and loan guarantees had been decreased and credit check fees had been eliminated.
The maximum credit line guaranteed for the letter of credit product for retailers was also increased from $10,000 to $12,500 to allow retailers to defer duty payments when they import goods.
Repayment has also been moved from three months from each importation date to four months, which would allow retailers to sell their products before they paid duty fees.
Mr Simmons said that retailers were paid every week to prevent delayed payments that could “literally mean the difference between the life or death of their businesses”.
Crystal Caesar, a PLP senator until Government was dissolved for the General Election, said that there were “stories and people” behind the loans that were offered.
She added: “When we say that we offer $12 million in grants and loans — which is a massive increase from before — that means hundreds of Bermudian owned businesses getting affordable capital to invest in businesses and create jobs.”
Ms Caesar appealed to small business owners to visit the BEDC for support.
She added: “The BEDC is going to play a large role in the Covid economic recovery and I encourage all Bermudians who have an idea for a business to work with us and together — we will make your dreams come true.”
An OBA spokesman said that more information was needed to see what the Government would do over the next few years.
He added: “The economy is teetering on the cliff edge and we have seen nothing coming from David Burt about how he plans to bring us back from the brink of an economic disaster.”
The spokesman added: “It is all well and good that the BEDC has done things like waive fees, but the best way to support businesses is to stimulate the economy.
“We asked before Covid what the plan was and we ask again — what is the Premier actually going to do to help the small businesses which are the lifeblood of Bermuda's economy?”