After conducting a jurisdictional review of what 17 other countries, regions, and cities were providing to assist small and medium-sized businesses impacted by Covid-19, the review indicated that the vast majority of the jurisdictions were providing loans to businesses and where grants were provided they were very small grants, some for specific industries, and were combined with loans to provide the best relied to businesses.
After digesting the programmes from other jurisdictions, analysing survey data collected from business between March 20th and April 16th, 2020, assessing the near 100 applications for financial support received thus far to BEDC up until April 16th, 2020, and running scenarios on how to divvy up the $12M the Government has provided in financial aid, BEDC determined that the $12M would have the greatest impact through providing a total package of direct funding from BEDC to businesses made up of 50% in loan funds and 50% in grant funds per successful business.
BEDC determined that solely providing direct grants would not be the best use of the funds, but if grants were allocated as part of the overall loan financing package, small businesses would have some relief for payables or arrears accrued as a result of Covid-19. For all intents and purposes, it could be looked as a relief from the Government in exchange for reliefs of taxes.
BEDC also determined that the total amount of funding would be determined based on the businesses annual revenue or number of employees in order to segment requests between small businesses and medium-sized businesses and that medium-sized businesses would not be eligible for the grant relief as they would be in a better position to take advantage of BEDC’s other Covid-19 financing support with external entities such as the Banks through guaranteeing bank loans and overdrafts.
As such, funding thresholds are divided into 5 bands of financing with the first 4 allocated to small businesses as defined in BEDC’s legislation and the last band allocated to medium-sized businesses as defined in BEDC’s legislation. Funding is distributed in tranches based on an agreed-upon schedule between BEDC and the business with a minimum 6-week and maximum 3-month period. The disbursement of the last tranche tied to ensuring the business meets its conditions with regards to retaining and/or re-employing a percentage of its Bermudian staff. See funding matrix below for first-time applicants: