Looking for funds

Avia Ustanny, Staff Reporter

WHERE can you go to get the start-up funds for a new business? This is the challenge that will face many Jamaican entrepreneurs.

If you have collateral (such as a titled real estate or a car) you may want to take the risk of commercial bank funding (if you cannot repay, you might lose your collateral, however). Interest rates vary according to the size of the loan, but they average, as of March, 2000, between 33 per cent and 38.60 per cent.

Most will want to go for government and international funding, at lower rates, available through institutions like MIDA, EXIM, NDFJ, NDB, the Community Revolving Fund and several others.

Credit unions will also lend at relatively lower rates, a multiple of what you have in your share account.

New on the funding market is Development Options, a small business lender of funds from as little as $2,000 to a maximum of $100,000 for entrepreneurial purposes, without asking for collateral. Instead, the company requests a sound business plan and several references. The organisation will also take into consideration your record of credit payments, such as hire purchase, when making its decision.

Sameer Younis, a director of the Jamaica Chamber of Commerce Inner-city Leadership Training Programme and chairman of Junior Achievement in Jamaica, advises that before seeking funding, the potential businessman should be trained in how to balance the books.

"The management of cash flow and month-to-month budgeting can make you or break you," Mr. Younis said.

He told the story of Lloyd Phillips, of downtown Kingston, who started a grocery store in 1993 with $9,000. Sensibly, he refused to touch the profit for the first five years, riding his bicycle to work and wearing old T-shirts, while putting back the money into the business. Today, he owns the building which houses the first shop, plus a second store.

Do you have the discipline to do that? Here are tips gathered from those who have turned their dreams into reality: