The Government signed a game-changing agreement with the Access Accelerator Small Business Development Centre (SBDC) and several financial partners to secure up to $9 million in capital funding for small businesses across The Bahamas. This represents the largest single allocation of investment funds for Bahamian entrepreneurs ever made before.
“When I presented the Government’s budget last June, we announced an allocation $5.5 million for micro, small and medium sized enterprises (MSMEs). We promised this money would go directly to entrepreneurs. Today, we are making good on that promise. And thanks to the tremendous efforts of the SBDC and its partners, we are delivering even more,” said K. Peter Turnquest, Deputy Prime Minister and Minister of Finance, at a press conference earlier today.
“By bringing in additional funding from our partners, we leveraged the government’s $5.5 million to secure up to $9 million in capital financing for small businesses across The Bahamas,” said Minister Turnquest.
He also emphasized that the programme is designed to empower young Bahamians, Bahamians in the Family Islands and Bahamians from disadvantaged backgrounds that have the ideas but have never had the opportunity. The official signing took place last week in Grand Bahama, at the launch of the SDBC’s Northern Bahamas operation.
How to access capital funding?
Participation in the SBDC’s structured training and business advisory programmes is a requirement for access to funding. This ensures businesses – both startup companies and existing small businesses – have the necessary tools and support they need to be successful. Participants register online at www.sbdcbahamas.com.
Three forms of capital are now available:
- Government guaranteed loans. Entrepreneurs will now need far less – if any – personal collateral to qualify for a small business loan by virtue of the Government’s 75% guarantee.
- Grants for impoverished young Bahamians. This means immediate seed money to pump into your business, and to support a loan or equity injection. These grants are specifically targeted at Family Island entrepreneurs, and young people under the age of 40 with little financial means. Individual grants will be capped at $20K. This money will not have to be paid back. Grants also are paid directly to vendors for the goods or services provided to the entrepreneur.
- Equity financing. This means access to money from investors in exchange for a share of the company. For a small business, the investor would become a minority partner, until the business matures and the investor can be bought out. The target range for this form of capital financing is approximately $20,000 to $50,000, but can go up to $100,000.
Which partners are involved?
Early partners include The Bahamas Development Bank, the Bahamas Entrepreneurial Venture Fund, the Royal Bank of Canada and Scotia Bank. Minister Turnquest urged the broader banking sector to get on board.
“I’d like other private commercial banks and financial institutions to take note, because we expect this initiative to create a fundamental shift in the way the banking sector sees small businesses in this country. The partners you see here today are leading the charge and we expect others to follow,” said Minister Turnquest.
“We have already committed up to $25 million over a five year period, which means this is just the beginning. We are also actively working with the IDB and its private sector units to potentially access substantially more capital to support Bahamian entrepreneurs. You will hear more about this in the coming months,” he said.
Source: Central Communications Unit, Ministry of Finance
Date: February 6, 2019