Govt deal increases start-up funds to $9m


Tribune Business Reporter

BAHAMIAN entrepreneurs were yesterday urged to “think big” and target the export market, after the government signed a deal that increases their available funding pool to $9m.

KP Turnquest, deputy prime minister, said the direct capital funding available to micro, small and medium-sized businesses is set to increase by almost two-thirds compared to the original $5.5m thanks to the government’s agreement with the Access Accelerator Small Business Development Centre (SBDC) and several financial partners.

The other partners, who include Royal Bank of Canada (RBC), Scotiabank, the Bahamas Development Bank (BDB) and the Bahamas Entrepreneurial Venture Fund, will participate in what was branded the largest ever single allocation of financing for Bahamian entrepreneurs.

Mr Turnquest said the agreement “made good on a promise” by the Minnis administration to provide direct funding access for Bahamian entrepreneurs. It had previously committed to investing $25m to help develop small and medium-sized enterprises over a five-year period.

“When I presented the government’s budget last June, we announced an allocation of $5.5m for micro, small and medium sized enterprises,” he added. “We promised that this money would go directly to entrepreneurs. We are making good on that promise and, thanks to the tremendous efforts of the SBDC and its partners, we are delivering even more.

“By bringing in additional funding from our partners, we leveraged the government’s $5.5m to secure up to $9m in capital financing for small businesses across The Bahamas. We expect that this initiative will create a fundamental shift in the way the banking sector sees small businesses in this country.”

Mr Turnquest, calling on other lenders not currently participating in the initiative to “take note”, said participation in the SBDC’s training and business advisory programmes was required for entrepreneurs to get access to funding and ensure businesses - both start-ups and existing – have the necessary tools and support they need to be successful.

“We’re not just handing out money but ensuring that businesses have the necessary tools and support they need to be successful. This money is accessed through the SBDC’s structured training and business advisory programme, set up with an independent government structure, so that persons don’t have to come to any politician to get approval,” Mr Turnquest added.

Mr Turnquest explained that funding will be provided via various forms, including government guaranteed loans up to 75 percent of the total amount borrowed, which will reduce the amount of collateral/security entrepreneurs must put up.

Grants, capped at $20,000, are targeted at “impoverished young Bahamians” - mainly Family Island entrepreneurs and those under the age of 40 who lack the means to obtain financing.

The final option is equity financing, where an investor becomes a minority partner in the business and they are bought out. The target amount for equity financing is between $20,000 to $50,000, but it can go up to $100,000.

“We want Bahamians to think big, dream big and think outside the traditional way we have done business, the traditional businesses here, and look to the export market,” added Mr Turnquest. You have to look across the Caribbean where there are similar tastes, desires and circumstances, and see how to exploit those markets to create an even bigger platform for the provision of goods and services.”

Geoff Andrews, the SBDC’s chairman, said that close to 2,400 persons have signed up with the organisation to-date, including over 450 on Grand Bahama during its launch there last week.

Davinia Blair, the SBDC’s executive director, added that its programme was “not business as usual”, and reiterated that the only path to funding was through its training programme for start-ups or advisory initiative for existing businesses.