‘Bailout small biz,’ SBA chief urges

A bailout for micro and small businesses worth $10 to $15 million is urgently needed as they continue to buckle under the impacts of the COVID-19 pandemic, Chief Executive Officer of the Small Business Association (SBA) Senator Lynette Holder pleaded today.

Likening the sector’s need for help to the economy being at the brink of collapse, Holder told Barbados TODAY she saw no reason Government could not provide some help to a sector that was now “severely hurting”. Holder declared that some small firms have already closed as a result of the COVID-19 pandemic, while several others are on the verge of collapse and are crying out for urgent relief.

She said: “I am saying a relief fund in the order of $10 to $15 million in the first instance. I know Barbados is in an International Monetary Fund programme but I am satisfied that the same way we can find funding and support for other key sectors, and rightfully so, we have to do it for micro and small firms that contribute to the employment generation to this country and make a significant impact not only economically but socially.”
The latest figures on small businesses from over three years ago showed that there were more than 9,000 registered firms in Barbados.
Just over half of them at the time employed between five and 25 people and the rest at the time had fewer than five workers.
A recent short survey of some SBA members to gauge the likely impact of COVID-19 showed that 88 per cent of businesses feared the loss of staff and revenue and about 50 per cent of them feared their operation would close in a matter of weeks, she said.

The SBA CEO told Barbados TODAY that the sector was urgently in need of a bailout to help them at least over the next six to eight weeks.
She said: “We need to have this relief fund set up as a matter of urgency, that can support those micro and small firms.
“This has a serious social implication because they can’t work, many of them are not considered essential services, many of them are in the category of firms that have to close during this two-week [curfew] period.

“Mind you, it is for two weeks now, but it might very well be a further two weeks by the time we get to April 14 and heading into May. So we are speaking realistically about a good six to eight weeks where these firms are going to lose significant revenue, and we need support for the sector.”
Holder also said that while the commercial banks will give a moratorium on loans and mortgages, many micro and small firms did not have those arrangements with commercial banks but with government funding agencies. As such, she reiterated her call for those agencies to be “included in the moratorium to give some relief to those at the lower level in this structure that have loans from them”.

Holder said she did not believe the IMF would disagree if Government wanted to provide up to $15 million to save the sector during this difficult time, especially given its importance to employment and economic contribution.
Not providing financial relief would not only be “fool hardy” but would “have a greater deleterious effect upon us than the COVID-19 itself”, she argued.
“For sure we need to have that support for the sector right now. It is hurting, severely hurting. So the SBA is calling on Government to move with alacrity to be able to address this relief fund for the sector.”

The SBA head also called on the Barbados Light & Power Company to grant micro and small business firms relief from paying their electricity bills for “at least three months”. “All of our firms will right now see a reduction in revenue. It is no debate on that and the major costs for businesses as you know are staff, rent, utilities and some have loans,” she said.

“Yes, we are calling for 100 per cent, but if we can’t get 100 per cent look at 50 per cent or some sort of significant reduction for at least a three-month period to be able to provide some relief. I don’t think the Barbados Light and Power don’t have the reserve that they can do something like this.”
Holder said the SBA had already made the case for the Barbados Investment and Development Corporation and other landlords to give relief to micro and small business firms.

She warned: “My concern right now is going through this period, going through the next two months and trying to mitigate the fallout of micro and small firms to the extent that they are unable to recover. That is my major concern. I feel that the next two months have to be about survival, have to be about stopping small firms from falling through the cracks.”

Article written by Marlon Madden of Barbados Today

Taken from the Barbados Today E-Paper