By NEIL HARTNELL
Tribune Business Editor
The government was yesterday urged to make a $15m “bail-out” fund available immediately to prevent Grand Bahama small businesses already “on their last legs from going belly up”.
Carey Leonard, pictured, the Callenders & Co attorney, speaking ahead of the two-week national lockdown imposed last night by the prime minister, said many entrepreneurs on the island - now in the second week of its own shutdown - were staring “three strikes and your out” squarely in the face.
Having been hit by both Hurricane Dorian and the initial COVID-19 restrictions, followed by now a second lockdown, Mr Leonard called on the administration to provide $10,000-$15,000 grants to around 1,000 enterprises to “shore up” the Grand Bahama’s small business sector and prevent it from collapse.
Arguing that loans, which come at a price, would simply increase the burden on already-struggling entrepreneurs, he told this newspaper: “I appreciate the Prime Minister’s in a Catch-22 and he’s got to stop the spread, but there needs to be an emergency bail-out fund for the little man; the small businesses.
“Freeport got hit very hard by Dorian. There was no business at all in October and November. Companies got back on their feet in December, and just started to get going again when along came COVID-19.
“These guys are on their last legs and I think you’ll start to see a number of those businesses go belly-up unless the Government comes in with $10,000-$15,000 grants for 1,000 of those small businesses; $10,000-$15,000 to shore them up,” Mr Leonard continued.
“We had Dorian, got hit by COVID-19 and now are getting hit again. For some of these small businesses it’s three strikes and you’re out. It’s tough enough for the stronger businesses; it’s impossible for the smaller businesses.
“I’m really, really concerned about the small businesses. They’ve been taking such a beating since Dorian. They’ve got to be looking at $10,000-$15,000 minimum. If they earmark $25m for Grand Bahama, some $10m can go towards testing and the rest to small business. We’d all be a lot better off. Ten million dollars would buy enough testing to test all the population of Grand Bahama.”
Grand Bahama-based businesses were already receiving thousands of dollars in post-Dorian grant funding from Team RISE, which stands for Restoring Industries and Sustaining Employment, a partnership between The Grand Bahama Port Authority (GBPA), and Mercy Corps International (MC), a global humanitarian aid organisation, together with key funding partners, Bacardi Global and the American Red Cross.
Mr Leonard’s call is to vastly increase the grant funding available to Freeport and Grand Bahama-based businesses via the Government. How that would work and co-ordinate alongside the RISE initiative is not clear, though, and such an initiative would further extend and already over-stretched Government and Public Treasury given this year’s projected $1.3bn fiscal deficit.
The new national lockdown, unveiled by the Prime Minister last night, will also mean demand and pressure for grant funding will not simply be confined to Grand Bahama but will now extend throughout The Bahamas.
However, Greg Laroda, the Grand Bahama Chamber of Commerce’s president, yesterday backed the concept outlined by Mr Leonard on the basis that many companies and entrepreneurs are “very timid’ about taking on loans or other forms of debt financing due to the difficulty of making repayments during the constant lockdowns.
“In the early stages, when we did the survey as the Chamber, businesses said they needed access to low-cost capital to help them recover,” Mr Laroda told Tribune Business. “What that means is getting a loan, and if their store is not open they can’t have customers and revenue to repay the loan.
“They’re very timid about getting a loan and would prefer grants. They would be getting a loan in an environment that is really, really strained, and even before Dorian and COVID it was really strained, so you can only imagine how it is now.
“To get a loan in these circumstances will take a lot of courage and confidence by persons seeking those loans. Sooner or later persons will decide not to take a loan because of the uncertainty associated with paying it back, and this is when you’re going to see a lot more close,” he continued.
“We can only pray there’s some light at the end of the tunnel. Hopefully that light is not a train, and then we will have to see how best to survive and get out of this.”