Cost of financing down
Thu, 04/07/2016 - 6:08pm
The banking environment is right now well poised to help local businesses.
That’s according to Gregory Blackman, Manager, Sales and Business Development with CIBC FirstCaribbean International Bank. He made the comments during an interview with the media recently, as he responded to the concerns raised by small businesses over the years about their inability to not only access financing, but at a reasonable cost.
“The good thing about the market today is that the cost of financing has really come down. So this is actually an excellent time for businesses to borrow money because the cost of finance has been significantly reduced versus several years ago when the interest rates were higher,” he said.
Blackman added, “[But] there is always a trade off. So on the investment side persons with lots of deposits may complain that rates have come down, but from a macro economic standpoint the good news is that the reduction in rates means that the cost of borrowing is being reduced, so that can finance expansion, that can finance investment at much lower rates, so that can be a stimulus for the economy.”
With that in mind, the Sales and Business Development Manager indicated that to access this financing, the business owners would need to show the bank that their affairs are in order. He made the point as he explained that one of the major challenges that many businesses have is the keeping of adequate records. Any decision to provide financing, he explained, is based on the verification of the income information provided by the business, which he said would require that they are filing their taxes and have their accounts up to date. The latter, he said, could be achieved through accounting software such as QuickBooks.
On the other hand, the CIBC FirstCaribbean official said there are potential clients who are fantastic at record keeping.
“We may have a small business owner who runs a stall at the side of the road; this person is a whiz at keeping records. They pass everything through the account, the segregate their personal funds from the business funds so they are able to reconcile and that gives banks [and] financial institutions confidence that what they are reporting is accurate. Once we are comfortable with the information, we are happy to provide financing,” he said. (JRT)