About theDebt Consolidation Micro-Loan Program
BEDC can offer debt consolidation micro loans to small businesses up to a maximum of $30,000. A total of $200,000 has been allocated to this initiative.The Debt Consolidation Micro Loan, a bridge product to BEDC’s initial pure business development micro-loan, was created in line with BEDC’s dialogue with small businesses over the last 3 years. Many communicated that, primarily due to the recent recession, such a product would be helpful to consolidate small debts, reduce their carrying costs, and thereby increase business cashflows.
What is the purpose of the BEDC Debt Consolidation Micro Loan?
The Debt Consolidation Micro Loan is designed to assist existing businesses with consolidating business back debts between $5,000 and $20,000.
- The back debt must have been accumulated within the last 3 years
- Evidence of back debt related payment plans and/or evidence of attempts to repay as best as possible may be required
The details of the Debt Consolidation Micro Loan are as follows:
No Need for Collateral
Structured for Success
Economic Empowerment Zone Businesses and Island Vendors:
The Debt Consolidation product is available to all small and medium businesses island wide, including vendors and those businesses located in a designated Economic Empowerment Zones.
The BEDC defines a small business as Bermudian – owned and managed; operating locally; having an annual gross payroll not exceeding $500,000 or having annual sales revenues of less than $1,000,000.
The BEDC defines a medium-sized business as a Bermudian-owned & owner-operated business enterprise with at least three of the following attributes:
- Gross annual revenues between $1 million and $5 million
- Annual payroll between $500K and $2.5 million
- A minimum of 11 and a maximum of 50 employees
- In operation for a minimum of 10 years
- Net Assets of less than $2.5 million
Although open to all businesses who meet the criteria, the BEDC desires to expose Bermuda’s small business.
Should you be approved, you will be required to sign a BEDC Loan Agreement as well as a Standing Order Agreement with your bank to ensure payments to BEDC are automatically deducted. The BEDC will then pay the vendors who are owed the back debts directly via direct deposit and provide you with evidence of all payments totalling the total amount of the BEDC back debt loan.
After payment of all back debts, BEDC then schedules the first follow up meeting with you to take place within 2 weeks of the date of dispersed funds. The Officer will check in bi-monthly with you by phone and meet with you every month for the first 6 months and then quarterly for the life of the loan.
Please ensure that you have reviewed the checklist below and have all the necessary information needed to apply.Complete and compile all information below, BEFORE filling out the application.