Banks ready to dole out CIG-backed business loans
(CNS): Medium and large local businesses meeting the criteria can now apply to one of five local banks to borrow as much as CI$3 million, backed by government. Finance Minister Roy McTaggart said the loan programme was to help businesses deal with the financial hardships of the COVID-19 pandemic. Confirming that banks were ready to process applications, McTaggart said government was guaranteeing up to 50% of all the loans.
He said that since parliament voted on the government motion in October, the paperwork had been reviewed extensively by the local banks involved, the legal department and his ministry, as well as a private sector law firm.
The loans are designed to help businesses that are at least 60% owned by Caymanians with operating and capital expenditure or re-financing of existing debt. Under the definitions, medium sized firms can borrow up to Cl$750,000, while large companies can seek loans for up to Cl$3 million, half of which will be guaranteed by government.
“On behalf of the government, I wish to thank the participating banks for their willingness to partner with the government in assisting medium and large sized entities in any financial difficulties they may be experiencing,” the minister said via Zoom, as he is understood to be in isolation after travelling overseas.
The banks involved are Butterfield, Cayman National, FirstCaribbean, RBC Royal Bank and Scotiabank, and they have made up to CI$200 million available. They will be charging the prevailing Cl or US dollar prime interest rate plus a margin of up to 1.5%. The current rate is 3.25%. Borrowers will get a year’s moratorium period on the interest payments and the maximum repayment period is seven years.
Banks can charge their usual application, commitment and legal fees and may even require other security from borrowers, in addition to the government guarantee. Government will, however, waive the 1% – 1.5% Stamp Duty that may be applicable.
See the full statement here
Category: Business
60% owned businesses less than a year old got nothing, right where it hurts most.
Just cut the costs and red tape.
Far too many people employed in government jobs doing nothing at all.
Improve the IT and let capitalism run without interference
Small businesses need support, not some multinationals with Billions in the banks.
I’d rather see the money spent on training and skills
How about giving every household $500 one time per person duty free like if we could fly?!?!?
Just let all the small business owners go out of business or lose their home.
This government sucks!
I would close down first. Screw this corrupt government.
Happy to see the private sector stepping up. Team Cayman!
You can bet the banksters & lawyers will get their cut upfront. While this program sounds good the reality is that the banksters are going to say, your business is not producing enough revenue to repay the loan and you don’t have enough hard assets to guarantee your 50%. I’ve seen this with both commercial loan requests and home mortgages. No revenue no loan. Catch 22.
Lawyers are crooks in suits. $500 an hour or more, Screw the lawyers, screw them all. Thieving scumbags,
Why so bad minded against tourisim workers they have no where to turn too, give God thanks the government can give them a helping hand merry Christmas to everone
Its actually a fantastic idea and the effort involved to make it work must have been pretty intense. The downside obviously is that very few businesses will be able to afford the short term loan terms. But you can’t save everyone, so at least CIG have tried something.
it would be good to see some form of global stimulus that directly reduces COS% of living for everyone. Something akin to CIG paying all CUC bills for past 6 months or similar. Dont hate me, its just an idea that would actually go immediately and directly into people’s pockets and bypass 3rd parties managing to skim fee’s, etc off it (as the lawyers and banks will in this commercial loan announcement).
There is some merit to your thinking. However, I still have a job and can afford to pay my CUC bill, so it shouldn’t include me or anyone living in million dollar homes with huge monthly bills.
I would be happy to see our government pay utility bills directly to the company for all of those who have fallen behind and are working with the utilities on payment plans. Of course, this would only apply to electricity and water, some of us would have to learn to live without the expensive cellphone and tv service if they have budget constraints.
10 months into the pandemic….
Hey Nicky, your two “featured articles” buttons are broken. Doesn’t work at home or at work. Can’t click on the right one to see the other featured article about the protest tomorrow, just sends me to the top of the page.
CNS: Thanks for the heads up. I’ve reduced the featured articles to one as a quick fix until I can sort it out.
There must be further details on this guarantee, like triggers for defaults, reporting of past due status etc to the Government. Or is it one of those harum sacrum political bail out schemes.
Mind you I am not critical of the effort, but of the seemingly lack of further detail on processes i if any. After all, it is the people who will be obligated to pay 50% on total defaults. If there are more details let’s see them CIG . It is our right to know. Dem days over, let that be a warning to any future government..
I can see the banks requiring 50% solid collateral, and in the event of default they will be fully reimbursed with our Govt. Piggy Bank having to hand over the other 50%. A $3 million loan will require the borrower to repay $600,000 in the first year.
One thing I know now for sure is this island is not broke!
China is Lord!
It’s not loans we need its stimulus packages! When are our people going to get a cut of the taxi/cruise tourism pay out????