Interest-free loans for locating in the EEZ

The “EEZy Does it!” series of articles provides an opportunity to explain the EEZ initiative, and explain how the various incentives and benefits have made a difference in each of the three zones: Northeast Hamilton, Somerset and St George’s.

This article will highlight  the “BEDC EEZA Small Business Loan”.  

Similar to the EEZ Payroll Tax Concession, and the EEZ Customs Duty Deferment, all the Bermuda Economic Development Corporation’s (BEDC) EEZ incentives and policies are aimed at assisting businesses to grow and become more sustainable in the three EEZs. 

The BEDC EEZA Small Business Loan is an interest-free loan product created to help develop and cultivate entrepreneurship in an Economic Empowerment Zone. 

Originally conceived as a product to help businesses grow through financing working capital schemes, the product has now evolved to also include non-working capital needs.  

Businesses benefit from a relatively easy application process, excellent business advice and support from Economic Development Officers and paying no interest on the loan.

The details of the current loan programme are as follows:

n Small loan amounts up to a maximum of $5,000 (typically between $2,500 and $5,000)

n No annual interest (zero per cent)

n Repayment terms up to 18 months.

The loan was designed to give entrepreneurs and business owners access to some of the seed money needed to grow their business. The loans were intended to be one in a battery of tools to assist EEZ businesses with resources necessary for them to be successful. 

The loan is available to finance small purchases as an alternative to traditional avenues of business financing that would not historically be supported at such small amounts.  It also helps businesses to build credit without incurring additional finance costs.

The loan can be used to finance a range of business needs.  Examples include items such as:

• Seasonal inventory purchases;
• Additional seasonal staff wages;
• Additional/new equipment purchase;
• A retainer for financial services provider;
• Business plans;
• Renovation and/or development plans;
• Marketing or branding/rebranding plans;
• Accounting services;
• Incorporations;
• Obtaining legal business advice; and
• Other working and non-working capital schemes.

Currently, the number of loans that can be given in any year is dependent upon the budget available; the number of applications received; and the scope of business needs contained in the applications.  

Since 2008, 11 loans have been issued resulting in just over $113,000 advanced.  

McCartney K. Darrell and Tory Darrell, owners of Building Blocks Academy is one of the businesses that took advantage of the EEZ Loan. 

When asked about her experience working with the EEZA team and using the Loan product, Mrs. Darrell offered: “Often times a vision for a business can feel far fetched and unattainable however with the assistance from Roxanne Christopher and the entire EEZ team we were able to overcome every obstacle we faced. 

“The support reassured, educated and matured us as business owners and we are forever grateful for this programme. Our school has also brought life and a splash of colour to the North Hamilton Area and we are blessed by the clients we have and their patronage. The interest free incentive offered us time to climb through every financial hardship and issues that came our way. The EEZ team provided the support and incentives we needed to turn our stumbling blocks into Building Blocks. Go EEZ and thank you to the government of Bermuda. We are most certainly open for business.”

Any business based in an EEZ or looking to be based in an EEZ is eligible to apply subject to various requirements.  

Further, the business must be registered with the Bermuda Economic Development Corporation.  

For further details and information on how to apply for an interest-free loan, the process, and the terms and conditions can be found online at www.bedc.bm.  You can also contact the EEZA at 292-5570 or email [email protected].

Erica Smith is director of the Economic Empowerment Zones Agency, responsible for ensuring the development and implementation of Economic Empowerment Zones throughout Bermuda.  

Through the creation of adequate policies, Erica manages the transformation of Bermuda’s three EEZs in North East Hamilton, Somerset and St. George’s, to ensure economic, social and physical issues are identified and addressed.   The opinions expressed in this article are those of the writer and should serve a general guide and should not be considered as replacement advice from a lawyer, accountant or other professional service provider. Readers should consult with the appropriate professionals as necessary.