BELIZE CITY, Wed. July 29, 2020– The Government of Belize has announced that a consolidated line of credit has been secured for stakeholders in the tourism industry. This financial relief will come in the form of loans that will be administered and distributed by the Development Finance Cooperation (DFC).
These funds were provided in part by the Caribbean Development Bank, which, at first, had placed restrictions on lending monies for working capital to affected businesses.
Prime Minister Dean Barrow said that he had to negotiate with the bank’s president in order to have those conditions lifted to allow the loans to be used to carry out the daily operation of the companies in order to keep them afloat.
The loans will carry a six percent interest rate, to be covered by the recipients, while the Government has committed to subsidizing 1% interest, amounting to $100,000, that otherwise would have been added to the interest rate of the loan and would have been paid by the borrowers.
Financial Secretary Joseph Waight said that GOB is in the position to provide the support. “One percent of ten million dollars, if my math serves me correctly, is one hundred thousand dollars,” he said.
The program, scheduled to commence on August 3, will offer loans between $20,000 and one million dollars to those stakeholders in the tourism industry who meet the eligibility criteria.
In outlining this criteria, Natalie Goff, DFC’s general manager, specified who would qualify for the loans: “Belizean nationals, residents or non-nationals, or any locally registered entity with no less than 51 percent Belizean ownership; however, considering that in the tourism sector we do have non-nationals who are employing Belizeans and generating foreign exchange to the country, those will be looked at on a case by case basis,” she said.
Goff said that the businesses must have been in operation prior to the onset of the COVID-19 pandemic and must be in a relatively good standing with their financial institutions.
They must also be able to provide their financial records and tax statements. The businesses will be required to retain a minimum of thirty percent of their workforce, since the purpose of the program is to maintain economic activity and aid in economic recovery.
Goff said, “The loan payment will be determined based on the projected cash flow; however, at this time, we are giving a maximum of five years, including a 1-year grace period on payment of principal and interest.”
As mentioned, loans will start at $20,000; these can be secured with a third party signatory and a promissory note.
Loans of $100,000 or above will require real estate or other forms of collateral.
In Belize, the tourism sector has taken the hardest hit since the onset of the global pandemic. Even before COVID-19 reached our shores, cruise and overnight arrivals fell drastically before coming to a total halt.
This caused a shockwave in the industry which resulted in widespread salary cuts and in many cases, loss of employment.
This loan program seeks to provide some relief to allow tourism stakeholders to keep their doors open and a percentage of their staff employed.