EEZy does it: New micro loans here to help

The idea of this column is to explain the Economic Empowerment Zones initiative and explain how the various incentives and benefits are making a difference in each of the three zones.

This article will focus on a new financial product BEDC has developed to assist small local businesses, inclusive of EEZ and Vendor businesses, called the “BEDC Capital G Micro Loan”.

BEDC has partnered with Capital G to offer micro loans to qualified applicants. 

$100,000 in funds has been set aside to facilitate small loans in amounts ranging from $2,000 up to $7,500.  The product was developed in response to an identified gap in the lending market. Results from BEDC’s bi-annual stakeholder survey showed that small businesses were in need of financial assistance for small loan amounts that the banks would not typically finance for commercial purposes.  

For the first time, BEDC will not only fully secure these loans by offering 100 per cent guarantees, but will also offer a financial product that can also be used by vendor and peddler business owners, thereby also supporting the development of micro-enterprise in the island.

As more people become unemployed due to the challenging economic climate they are becoming what is known as “necessity entrepreneurs” by turning to vending and peddling to make ends meet. The micro loan is a product to assist in the development of these smaller businesses.

The micro loan is designed to assist start up and existing businesses with inventory purchases and/or capital items directly related to increasing sales or services. 

Any small business based in an EEZ or operating as a vendor is eligible to apply.

BEDC defines a small business as Bermudian — owned and managed; operating locally; having an annual gross payroll not exceeding five hundred thousand dollars ($500,000) or having annual sales revenues of less than one million dollars ($1,000,000).  

The details of the loan programme specifically for EEZ businesses and vendors are as follows:

• Approved loans are 100 per cent guaranteed by the BEDC

• No application fee

• $25 non-refundable credit check fee

• $50 bank processing fee

• Applications are processed by EEZA Officers

• Processing and approval within 10 business days

• 3.5 per cent ($BD Base Rate) - bank interest rate

• Repayment terms for inventory and goods between three and six months

• Repayment terms for capital assets between six months and 24 months.

• The business must be registered with BEDC.

Businesses benefit from a relatively easy application process, a quick processing turn-around time, and excellent business advice and support from Economic Development Officers.

As we are approaching the holiday shopping months, we anticipate that this product will be very helpful to businesses in preparation for this period.

If you are anticipating applying for a BEDC Capital G Micro Loan you will be required to provide BEDC with relevant information (i.e. personal information, business plan/profile, financial statements, cash flow projections, etc.).   

The Micro Loan Checklist will be able to guide you on the specific information required.  For further details and information please visit www.bedc.bm, contact the EEZA at 292-5570, or email [email protected]. 

For more knowledge on vending and peddling as a business please join us at our three-part fall workshop series.  

Two workshops remain on November 5 (Vending as a Business – Merchandising for Success) and November 19 (Bermuda’s Vendor Markets – Identifying your Niche). 

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.