Six (6) Things that must be done to get a Business Loan in Jamaica

By: Kmar Henry
        CEO │ BIZcare Consultation & Accounting Firm

Date: July 20, 2017

If you ask any Entrepreneur what's one of the most important tools that drive their business over that bridge of success; he or she will answer easily 'Cash Flow'. Financial support provides that candour needed to take your business towards the next level, that pivotal point of 'profit making' that all entrepreneurs dream. Hence, accessing a loan will be essential and thus should be a concern for every entrepreneur.  I’ve found it rather amazing that within our country, most of our entrepreneurs are still operating without awareness of the importance these aspects play in landing that business loan that they so desire. Here are six (6) things that Jamaicans must do as small business owners, in order to qualify and be approved for a business loan:

1. Keep Proper Records:

Perhaps one of the most prevalent issues facing small businesses today is improper records. Owners spend very little time to establish proper filing systems and most times see little in its importance. In order for your accountant to ascertain the figures needed to formulate your Financial Statements, he will need all the source documents to prove purchases, expenses, liabilities and assets throughout the period. Hence, establishing a proper record keeping system is highly essential to provide accurate figures for your loan officer to assess your potential to repay loan amount requested.

2. Construct a Business Plan:

A document that is unconsciously ignored by most business owners until their loan officer reinforces its importance. A Business Plan will strategically show and explain what any business person will do with the sum of money in the application. Loan officers will need this to use as a guide, showing how the applicant will use the loan to boost sales or production in the near future. But most importantly, providing more of an assurance, that their money will be repaid based on preparation and strategy.

3. Pass Money through a CHEQUING Account:

Yes, primarily, this is the first assessment that any bank will do, even before they ask for other documents. Maintaining a proper chequing account requires a small business owner to ensure that their sales, passes through their account whether daily or weekly. This will form the paper trail that every bank will use to distinguish whether you're able to repay the sum of money requested. While many businesses will argue that their cash is used up throughout the day, or most of their suppliers don't accept cheques, which is a reality. They need to keep in mind that this is physical evidence the bank will use to evaluate your ability to repay. Thus, passing your money through the bank will only help your business.

 4. Maintain a SAVINGS Account:

Yes, not your personal savings account but rather a business savings account. Remember ‘Cash is King', and that rule also applies to you providing more substantial evidence that you're able to pay back whatever amount requested. As I always tell my clients it's best to save in $US dollars based on our economy, hence the devaluation of our $JA dollar will be mitigated against using this strategy, also use this as a key indicator to demonstrate to your loan officer that you are always retaining some earnings for future use. This will certainly build more clout on your claim for a business loan.

5. Obtain Assets:

Although we must compromise with small business owners on this one due harsh reality and economic climate, the majority are not able to obtain assets until further down in their business journey. However, if you are able to save a small portion of your profits to purchase those valuable assets, that are necessary to boost production, business environment/ambience or sales, these can certainly be used as collateral to secure a loan.

6. File your Taxes:

Perhaps this is the one that most small business people find so hard to digest, as they are more interested in finding ways to alleviate/avoid taxes rather than literally paying them. But let's just accept it; we cannot get a business loan unless our taxes are filed. And not just filed but also paid and updated. Most if not all banks will ask you to provide your TCC (Tax Compliance Certificate), which proves that your taxes are paid and up to date.

Obtaining a loan will certainly thrust your business to new heights, whether it is that you're trying to buy new stocks, move to a new location or purchasing new assets. Maintaining these six (6) tips will prove essential to obtain a loan. Many entrepreneurs struggle to keep up with these processes and are pushed even further behind in their quest to improve their business operations. Please let us take the necessary time to ensure that these things are practised frequently.

If you need help or further information please feel free to contact us at 1 (876) 545-6928 or BIZcareConsultationAcct@Gmail.com to arrange your consulting session.

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Edited by: Xavier Campbell
              CEO │ Structural Creations

BIZcare Consultation & Accounting Firm is a consulting agency that operates within the small parish of Clarendon in the beautiful land of Jamaica. We are geared towards educating the minds of upcoming entrepreneurs of the important aspects that must be considered before starting their businesses. Hence why we operate under the slogan 'Your Business is OUR Priority' and tagline 'Helping Small Businesses & Individuals to better Organise their Business Functions.'

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