You’ve got the idea, you’ve done your research and you’ve spoken to friends and acquaintances who have been in business before. If they have given you an honest account of the highs and lows  of starting your own business and you’re still keen, here’s how to take things further…

Get good advice
The first thing you need to do is arm yourself with as much information as possible about how start-ups work. A great place to get this, as well as some potential funding, is from Local Development Units such as Small Enterprise Development Unit (SEDU) Nevis, National Development Foundation (NDF) Antigua and Centre For Enterprise Development (CED) St Vincent who offer business development services. Along with financing for micro and small projects they also offer assistance by way of business plan writing, putting together market research questions and training.  Some Business Development Units will only finance start-up projects and projects for existing clients to further their business potential. Others will provide financial assistance for any small or micro business project regardless of industry or stage of development of the business. 

Because of the community based nature of these agencies ideas are assessed on a case-by-case basis and may be approved based on the viability of the project and the need of the individual. Their loans are given at rates equal to that of or at 1%-1.5% lower than their commercial partners and will have to be repaid over a period not exceeding five years. However the majority of these loans are unsecured. The amount of funding can vary depending on the country; some will not exceed EC$30,000 (US$11,500), others will lend up to (but not exceeding) EC$150,000 (US$57,500).

Use the professionals
As part of your general preparation it is also important that you get the professional help you need in the areas you need it. Equip yourself early with a lawyer and an accountant who will give advice on business related activities specific to the country in which you are doing business. When choosing your ‘professionals’, always ask for recommendations from successful business people who you know and trust.

Secure funding
If you don’t secure finance from a local development unit, there are two distinctive avenues you can try to source financial assistance for the development of a small business in the Caribbean. These are Cash Capital and Donor Funded Technical Assistance (TA). First let’s look at Cash Capital…

Cash Capital
While we may all be familiar with the traditional methods of accessing cash funds from commercial banking institutions, Development Banks and Credit Unions, very often we do not consider the option of borrowing from personal friends and family. However, all these funding sources have specific criteria to meet and different terms of lending…

• Other’s people money (OPM) can be the most inexpensive way to start raising funds. To a large extent, the terms of repayment will depend on who you have borrowed from and the type of investment the individual wants to make in your business. This type of borrowing may eliminate interest repayments and will allow for more flexibility in the way the funds are used.

When approaching a family member or friend to part with their money in support of your new idea, be prepared to be met with many questions. They will want to know: how you hope you pay them back, and when, what research have you done, and whether people buy into your venture? All these are questions you should have already asked yourself, and you must be prepared to answer honestly. 

You should also, regardless of the relationship you have with the person you’re borrowing the money from, prepare written terms that you both agree upon. Emotional ties can sometimes lead to irresolvable problems that could jeopardise the future existence of the business – and your personal relationship.

Another avenue for securing OPM is to approach the people with whom you hope to do business in order to establish credit. Despite what you may think, credit from your suppliers when starting a business is possible. Meet with these suppliers, speak about what you think will sell and establish terms of repayment or conditions in return for a stake in the business. Many new businesses in the region have started that way and have had continued success because of the reputation they have gained from honouring their commitments and working with their suppliers.

• Credit Unions and Development Banks are your next best options. These institutions offer interest rates at 1.5% – 3% lower than commercial banks, and the security requirements are significantly less stringent. However their maximum limit for disbursement of funds is often considerably lower than that of a commercial bank, and the time period for disbursement of funds may be slightly longer than another form of lender as a committee will have to meet to agree upon your request.

• Commercial Banks should really be your last resort. Their terms for lending to small and micro businesses are the same as that of any other business, and throughout the region these lending requirements are often slightly demanding for a new business entrepreneur. The security requirement is often more than 98% of the amount of the loan and most do not offer special repayment terms for the business novice. Other requirements for the commercial banks include approved plans for building loans, additional guarantors on security-backed loans and additional personal guarantees.

Donor-Funded Technical Assistance
Despite the common stigma associated with technical assistance agencies, there are many areas in which they can provide vital free development support to your growing business.

When applying for a grant from a Technical Assistance Agency, speak to the grant officers about the exact requirements: it is their job to guide you as to the best way to complete the application, and to clarify the many grey areas that are often difficult to specify. Ensure that you have worked through all areas of the form before submitting it, as this may be the difference between a successful or denied application. Enquire, keep asking questions and be persistent!

Another important piece of advice you should take note of when funding your growing business is to keep an eye on the environment. Know what your government is doing for business development. What do the funding and development agencies have on offer? Having the answers to these questions can help with your medium to long term business planning. Donor agencies often offer free technical services, which can go a very long way if planned and utilised effectively.

• Finally, remember that wherever you go to secure finance, you should never overstretch yourself – borrow only what is needed after performing a very detailed analysis of your project requirements, based on advice from the right people.

For more information
There are development agencies in each Caribbean state, so do your research before making your approach. Here are the contact details for a few to get you started:

Antigua
NATIONAL DEVELOPMENT FOUNDATION, PO Box 502, St John’s
• Tel: (268) 462 1704/462 4441 • Fax: (268) 462 0342 • Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Barbados
BARBADOS INVESTMENT AND DEVELOPMENT CORPORATION, PO Box 1250, Pelican House, Princess Alice Highway, Bridgetown. • Tel: (246) 427 5350
• Fax: (246) 426 7802 • Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Dominica
NATIONAL DEVELOPMENT FOUNDATION OF DOMINICA, 9 Great Marlborough Street, Roseau • Tel:  (767) 449 8825 • Fax: (767) 448 0225

Grenada
GRENADA COMMUNITY DEVELOPMENT AGENCY (GRENCODA), Lower Depradine Street, Gouyave, St John • Tel:  (473) 444 8430/9490

GRENADA INDUSTRIAL DEVELOPMENT CORPORATION, Frequenté Industrial Park, St George's • tel: (473) 444 1035  Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Guyana
MINISTRY OF TOURISM, INDUSTRY & COMMERCE, 229 South Road, Lacytown, Georgetown • Tel: (592) 226 2505 • Fax: (592) 225 9898

Nevis
SEDU NEVIS, Department of Trade & Industry, Cotton House, Charlestown • Tel: (869) 469 5521/5790 • Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

St Kitts
FOUNDATION FOR NATIONAL DEVELOPMENT, PO Box 507, Bladen Commercial Development, Basseterre • Tel: (869) 465 2576 • Fax: (869) 465 9187

St Lucia
THE NATIONAL RESEARCH & DEVELOPMENT FOUNDATION, PO Box 3067, La Clery, Castries • Tel: (758) 452 4253/7083 • Fax: (758) 453 6389
• Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

St Vincent and the Grenadines
CENTRE FOR ENTERPRISE DEVELOPMENT, INC., First Floor Methodist Building, Granby Street, P.O. Box 2343, Kingstown • Tel: (784) 451 2235-6
• Fax: (784) 451 2237 • Email:  This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Trinidad
BUSINESS DEVELOPMENT COMPANY LTD., 151B Charlotte Street, Port of Spain • Tel: (868) 623 5507 • Fax: (868) 625 8126/627-6880 • Email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it