By YOURI KEMP
Tribune Business Reporter
Applications for the government's COVID-19 small business recovery loan have collectively sought double the $25m initially allocated for the programme, it was revealed yesterday.
Davinia Grant, the Small Business Development Centre's (SBDC) director, responding to questions at virtual town hall meeting on why the Business Continuity Loan initiative had come to a halt, said: "This programme started off as a $20m programme, and then to $25m, and since then we have gotten an extension on that and we are up to $37m [approved disbursements].
"The requests are up to $50m, and that is not including persons who have not completed the applications. In the new budget there is additional allocation for this programme, and at that time we will announce an extension. Some of the limits will be expanded and some of the other things at that time."
The $37m in approvals are some 44 percent greater than the initial $25m provided. The Government's 2020-2021 Budget provides a further $55m targeted at micro, small and medium-sized (MSME) businesses to help them ride out COVID-19.
K Peter Turnquest, deputy prime minister, said: "We recognise that the MSME sector represents 90 percent of business licenses and 50 percent of our employment. One of the things we know is that the government is the largest buyer of goods in the society. We can't do it all by ourselves, especially since we don't have the amount of visitors as we once had. We need locals out there buying in order to keep the engine going."
Asked about the slowdown in the Business Continuity Loan initiative, he replied: "We have exhausted the allocation in this budget, and the new budget will start on July 1. I imagine by the second or third week in July we will be back in the business of supporting these applications."
"We want to ensure that we maintain some level of employment during this shutdown. It is in our best interest to keep MSMEs open as we wait for the tourism sector to restart and provide that stimulus."
As for legislation to support MSMEs, Mr Turnquest added: "What we want to do is create a one-stop shop infrastructure for the MSMEs. We are looking at how we can streamline and coordinate all agencies for MSMEs, whether it is training, access, trade facilitation. So all of these MSMEs can go to one agency and get all the support they need."
He said the Public Procurement Bill stipulates that the Government makes provision to allocate some 20 percent of its contracts towards MSMEs that make $5m a year or less.
Mr Turnquest added that he wants to broaden the economic base to provide a source of foreign currency earnings outside the tourism sector, but called for the diversification of the tourism product and not a diversification away from tourism.
"Business has changed and the environment has changed, and we have to adapt and we have to look forward to how the environment will be moving forward and respond to that," he said.
"Having some level of confidence in your product and service is critical, along with having some comfort in your macroeconomic environment. Laying down the access to credit, the support from the government in terms of trade facilitation, in terms of export, assistance from the ministry of agriculture and marine resources in terms of technical know-how, and providing what we can to ensure that persons have the ability to access the services they provide.
"You cannot be afraid to take a chance. That comes with a degree of confidence. It is a matter of looking at your business model and having the willingness to change and make adjustments."