Government is moving full steam ahead with its plans to assist the local small business sector following last week’s budgetary statement.
In the Financial Statement and Budgetary Proposals, Minister of Finance, Chris Sinckler stated that the Trade Receivables Liquidity Facility (Factoring) for the small business sector, which was announced in 2008, will be launched tomorrow, December 1.
Chief Business Development Advisor in the Small Business Development Unit (SBDU), Ministry of Agriculture, Food, Fisheries, Industry and Small Business Development, Francine Blackman, pointed out that the initiative would provide support to local small businesses which suffered difficulty due to the inordinately long wait on Government for payment.
She explained that the objective of the initiative was to facilitate a more timely payment to small businesses that provided goods and services to Government.?? These payments, which are discounted, would assist in improving the cash flow position of small businesses.
The Factoring Facility has been made operational through a window established by the Central Bank of Barbados of up to 15 million dollars.
The SBDU has responsibility for registering all small businesses seeking to access the Factoring Facility. Financial statements must be submitted during the registration process. For those applicant businesses that currently do not have financial statements, a six-month grace period will be permitted for the submission of the statements. They must be prepared by a qualified accountant and the registration forms must be certified by a Justice of the Peace.
Ms. Blackman pointed out that for the purposes of this programme, a small business is so defined under the Small Business Development Act Cap 318C, where the small business must not have more than one million dollars as stated or paid up capital; not more than two million dollars in annual sales, and not more than 25 employees.
The Facility, she added, would be made available only through the following financial institutions: the main branches of commercial banks; the Enterprise Growth Fund, Fund Access, Consolidated Finance, Signia Finance, Globe Finance, Citicorp Merchant Bank and the Caribbean Financial Services Corporation.
The Chief Business Development Advisor also explained that for any one company, the total number of invoices that can be factored under the programme in any one year is BDS$200,000. and invoices are discounted at an annual rate of five percent.
Collection of the registration forms, as well as the actual registration process can be carried out at the Small Business Development Unit (SBDU) located within the Ministry of Trade and Commerce, Reef Road, Fontabelle, St. Michael.??
Persons may also contact the SBDU for further information on the Trade Receivables Liquidity Facility (Factoring) at 427-5270.??askeete@barbados.gov.bb