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Show Me the Money! The MSME’s Introduction to Various Financing Options
Tom Cruise and Cuba Gooding Jr. made “Show Me the Money” a household phrase in 1996 with their award winning performances in the Jerry Maguire movie, but on Monday, June 30th, 2008 it was the Corporate Finance Broker unit (CFB) of the PSDP programme and four of its MOU partners that brought it back to the fore. And there was no acting involved whatsoever; this was 100% real.
“Show me the Money”, another invaluable workshop in the CFB series, was designed to provide MSME’s with useful information on how to access funds for start up operations and business expansion. Senior Consultant in the unit, Mr. Laurence Adamson, set the tone for the half-day session when he told participants that his team was there to share information that “would empower them to make the right decisions when seeking financing”. Throughout the course of the morning, that goal was unequivocally achieved.
Not only were attendees encouraged to find creative ways to secure alternate sources of cash flows such as negotiating for extensions to supplier credit arrangements, choosing renting or leasing over buying, discount- ing receivables and debt restructuring and/or debt consolidation but they also benefited from advice on the general types of financing options available. The differences between Angel Funding, Mezzanine Funding, and Private Equity Funding were duly explained and eye-opening presentations were given by representatives from the unit’s MOU partners, Nation Growth Micro Finance, JN Small Business Loans Ltd., EXIM Bank, and National Development Foundation of Jamaica. Cumulatively, the four companies covered a wide range of products that cater to medium and small businesses. Loan caps and interest terms vary depending on the institution but the on average options start from as low as $20,000 and go up to as much as 5 million. Refresh- ingly, the collateral requirements were not as onerous as one would have thought either.
JN Small Business Loans had products under the Biz Start, Biz Grow, Biz Event and Biz Boost portfolios that catered to micro and small businesses. The company also announced that it manages the Tourism Enhance- ment Fund which has an enviable 3% interest rate.
The National Development, a private not-for-profit organization set up in 1981 to help MSME’s, shared information on their loan offerings which included innovative programmes like Get Up An’ Grow, Cash DevelUP, Cash Gro’ and Cash Flo’.
The National Export-Import Bank of Jamaica Ltd. (EXIM) made it known that companies no longer needed to be direct exporters to be able to access funds from their institution. As long as a company supplies goods or services for the productive sector and meet their other standard requirements, they can apply. EXIM Bank processes loans in USD and Jamaican dollars and funds can be accessed under the NIF Credit Facility, the JEA/JMA Working Capital Support Loan, Technical Training Programme and General Trade Line.
NationGrowth MicroFinance caters to businesses in the retail, service, manufacturing and agricultural industries and as a result their loan products fall into two categories – Retail/Trade Service Loan and the Agriculture/Manufacturing Loan.
Since its inception in 2006, the CFB Unit has existed to help micro and small businesses gain access to funding and several clients have had successful loan application outcomes because of their strategic counsel. In fact, one didn’t have to go very far to find the success stories that abound. If you stepped outside the workshop and into the lobby area of the Jamaica Trade and Invest building where a PSDP Mini Expo was taking place, there were four companies there that stood as a testament to the strength of what can be achieved from a close client-agency working relationship. Shelly and Markham Catering Services provided scrumptious refreshments and Everest Foods delighted the palette with delicious Ezie Salt Fish Fritters. Another CFB client, Chocolate Dreams, served a wide array of fresh fruits dipped in decadent milk chocolate and participants were able to wash it all down with Silver Hill Mountain Spring Water courtesy of Heaven Sent. The Jamaica Pig Farmers Association provided the pork served and Roy Baker, Vice President of the Jamaica Egg Farmers Association; taste- tested his egg based “power drink”.
The Corporate Finance Broker Unit continues to offer Business Development Services to the MSME Sector that are heavily subsidized by the EU through the PSDP and any business in the sector can access this service as long as they are registered with the Companies of Jamaica. The business development services include Business Plan Analysis and Advice, Cash Flow and Budget Review, Identification of sources for Finance and/or Technical assistance, Funding Proposal Assistance and Financial Planning and Accounting workshops.
