Well over a year in­to the COVID-19 pan­dem­ic, thou­sands of busi­ness­es fac­ing hard­ship have been forced to per­ma­nent­ly close their doors. While some own­ers have had their com­mer­cial prop­er­ties and pri­vate homes re­pos­sessed by banks, oth­ers are liv­ing in fear of suf­fer­ing the same fate if they are un­able to pay their month­ly in­stal­ments.

Frus­trat­ed busi­ness own­ers from Trinidad to To­ba­go com­plained that some banks are not be­ing flex­i­ble enough with them dur­ing this time of cri­sis and are plead­ing for help. Many oth­ers said they have been en­coun­ter­ing prob­lems ac­cess­ing fund­ing from the $300 mil­lion loan fa­cil­i­ty made avail­able by the Gov­ern­ment for strug­gling busi­ness­es dur­ing this pan­dem­ic. Busi­ness own­ers have been forced to look at al­ter­na­tives to com­mer­cial banks like cred­it unions and the Na­tion­al En­tre­pre­neur­ship De­vel­op­ment Com­pa­ny Lim­it­ed (NED­CO) as they make last-ditch at­tempts to save their liveli­hood.

Ac­cord­ing to a sur­vey done by the Con­fed­er­a­tion of Re­gion­al Busi­ness Cham­bers–which in­cludes 15 busi­ness groups among them the Su­per­mar­ket As­so­ci­a­tion, Pe­tro­le­um Deal­ers, The Yacht­ing Ser­vices As­so­ci­a­tion and es­tab­lish­ments from the East all the way to Siparia in the deep South–some 5,000 busi­ness­es have closed in T&T over the last 12 months since the pan­dem­ic hit in 2020. The co­or­di­na­tor of the con­fed­er­a­tion Jai Lelad­hars­ingh said the in­for­ma­tion came from a sur­vey of their as­so­ci­a­tions done in Feb­ru­ary. Lelad­hars­ingh said that many busi­ness own­ers are strug­gling and are in dan­ger of hav­ing their prop­er­ties re­pos­sessed.

“There are bank­ing fore­clo­sures tak­ing place in the con­struc­tion in­dus­try, com­pa­nies in the ser­vices sec­tor, com­pa­nies in­volved in the restau­rant sec­tors,” he added.

Lelad­hars­ingh said banks have not been help­ful to the busi­ness com­mu­ni­ty. He rec­om­mend­ed that the banks give the busi­ness­es a loan mora­to­ri­um for a year with no ac­crued in­ter­est.

“Banks make big prof­its while small busi­ness­es are suf­fer­ing. They need to help busi­ness­es re­struc­ture their fa­cil­i­ties.”

Port-of-Spain business being offered for sale or rent.

Shirley Bahadur

T&T Cham­ber and To­ba­go Di­vi­sion

CEO of the T&T Cham­ber of Com­merce Gabriel Faria, mean­while, said that a poll be­ing done with non-es­sen­tial busi­ness­es in the re­tail sec­tor, bars and restau­rants shows that so far ten per cent of busi­ness­es in that sec­tor have closed their doors per­ma­nent­ly.

He said the cham­ber was hav­ing dis­cus­sions with the bank­ing sec­tor and the banks are mak­ing an at­tempt to work with cus­tomers to meet their needs.

In the sis­ter isle, Chair­man of the To­ba­go Di­vi­sion of the T&T Cham­ber Di­ane Hadad said 250 busi­ness­es have closed in To­ba­go since the pan­dem­ic hit. She said there has been an in­crease in banks re­pos­sess­ing busi­ness prop­er­ties in To­ba­go.

She called on banks to give busi­ness­es a break and the op­por­tu­ni­ty to rene­go­ti­ate what they owed banks be­fore the pan­dem­ic.

“Bank fore­clo­sures dur­ing this time should be a no-no. Let us say in March 2020 the busi­ness own­er’s debt was a mil­lion dol­lars, let us stop there and let’s start a con­ver­sa­tion about how we will be­gin to re­pay in 2022. So there should be a mora­to­ri­um but not with ac­crued in­ter­est,” Hadad said.

Diane Hadad

Bar­keep­ers and Op­er­a­tors As­so­ci­a­tion

Pub­lic Re­la­tions Of­fi­cer of the Bar­keep­ers and Op­er­a­tors As­so­ci­a­tion of T&T Anil Maraj said 50 bars have closed per­ma­nent­ly in T&T over the last six months be­cause of re­stric­tions on their op­er­a­tions.

He said some bar own­ers are ow­ing the bank for their prop­er­ties and they are fac­ing the like­li­hood of re­pos­ses­sion be­cause of their in­abil­i­ty to pay their mort­gages.

He urged bar own­ers to work with their banks for so­lu­tions to their prob­lems.

Greater San Fernando Chamber of Commerce President Kiran Singh.

KRISTIAN DE SILVA

San Fer­nan­do Area Cham­ber, Busi­ness As­so­ci­a­tion

Pres­i­dent of the Greater San Fer­nan­do Area Cham­ber of Com­merce Ki­ran Singh es­ti­mat­ed that over 100 busi­ness­es have closed in the area. He said there are re­ports that banks could be re­pos­sess­ing com­mer­cial prop­er­ties soon as busi­ness­es can­not af­ford to pay their mort­gages. Singh said banks need to work with small­er busi­ness­es just like they do with the larg­er con­glom­er­ates. He al­so sug­gest­ed that they low­er their in­ter­est rates.

Pres­i­dent of the San Fer­nan­do Busi­ness As­so­ci­a­tion Daphne Bartlett has es­ti­mat­ed that 30 per cent of the small­er busi­ness­es, while al­most 20 per cent of the medi­um-sized busi­ness­es in the San Fer­nan­do area and en­vi­rons have closed per­ma­nent­ly over the last 12 months.

Based on per­son­al ob­ser­va­tion, Bartlett said she has seen “For Sale” signs in­creas­ing­ly be­ing put up by busi­ness own­ers.

“Many small busi­ness­es have closed their doors be­cause there are no in­come and ex­pens­es like rent, phone and elec­tric­i­ty are ac­cru­ing. These busi­ness­es would hard­ly be open in the fu­ture. Busi­ness­es are find­ing it dif­fi­cult to fi­nance their loans and cred­it fa­cil­i­ties, the banks are hound­ing them down for even small amounts. These banks make huge prof­its an­nu­al­ly.”

She rec­om­mend­ed that banks of­fer a mora­to­ri­um on small busi­ness loans un­til the econ­o­my im­proves.

Ari­ma Busi­ness As­so­ci­a­tion

The Ari­ma Busi­ness As­so­ci­a­tion has re­port­ed that al­most 200 busi­ness­es have closed in that area over the last 12 months.

Pres­i­dent of the as­so­ci­a­tion Reval Chater­goon, whose area cov­ers from Arou­ca to Va­len­cia, said there are some small­er busi­ness­es un­der threat of the banks re­pos­sess­ing their com­mer­cial prop­er­ties.

He sug­gest­ed that banks give busi­ness­es a six-month to a one-year mora­to­ri­um and low­er in­ter­est rates to as­sist them.

“There are a lot of busi­ness­es al­though closed still have to pay util­i­ties, rents, mort­gages, bank in­ter­ests al­though we are not mak­ing any in­come." He said they need "more time" to be able to pay their loans. This, he said, is in ad­di­tion to the need for more vac­ci­na­tion. Down­town Own­ers and Mer­chants As­so­ci­a­tion Pres­i­dent Gre­go­ry Aboud, mean­while, said that they do not have any sta­tis­tics on busi­ness clo­sures, and on­ly when the econ­o­my is ful­ly re-opened they will know.

Frus­trat­ed busi­ness­woman pleads for help

One woman who is on the verge of los­ing her home and busi­ness to the bank is ap­peal­ing to fi­nan­cial in­sti­tu­tions to try and un­der­stand the hope­less sit­u­a­tion that they have found them­selves in due to the pan­dem­ic.

The frus­trat­ed and de­pressed busi­ness­woman, who asked that her name not be used, is the own­er of three busi­ness­es in the East which in­cludes a restau­rant and bar. She said they can bare­ly pay their mort­gage and al­though they have a good record with the fi­nan­cial in­sti­tu­tion, the bank has not been flex­i­ble.

“My bank knows the kind of busi­ness I do with them. The banks need to de­fer loan pay­ments to give us a help­ing hand. I’m not see­ing any way out of this. This is very hurt­ful and frus­trat­ing.”

The woman said, “The land­lords gave us some time un­der the first lock­down. They ex­pect things to open back next month. But if I can’t re­open as I don’t have the mon­ey, what will they do? The land­lords need their mon­ey too."

Giv­ing de­tails on how much they pay in rent for the month, she said, "One place I'm pay­ing $25,000 rent, the next place I pay $15,000 and the third place I pay 10,000 month­ly.”

Even though she ap­plied for a Gov­ern­ment-backed loan for small busi­ness­es in 2020, they nev­er got a re­ply.

She said her fam­i­ly busi­ness was hard hit when the Gov­ern­ment sud­den­ly an­nounced the lock­down in April.

“When they im­ple­ment­ed the lock­down at the end of April, we had just spent $25,000 for goods, none of which we used as restau­rants were closed. We had it in the store and we said we could not let it go to waste so we gave em­ploy­ees rice, chick­en and flour out of that stock. I try to help my work­ers.”

The own­er said they may not be able to open their three busi­ness­es when the lock­down is lift­ed due to the heavy fi­nan­cial strain that they face. They might have to set­tle for re­open­ing on­ly one of the busi­ness­es. Al­though they em­ploy al­most 30 em­ploy­ees now, she said they may have to lay off work­ers if the sit­u­a­tion de­te­ri­o­rates.

She said if the Gov­ern­ment can of­fer a loan fa­cil­i­ty where they get a two-year de­fer­ral be­fore they start back to pay, that would help small busi­ness op­er­a­tors like her­self.

More busi­ness own­ers ap­proach­ing cred­it unions for loans

Lelad­hars­ingh, who spoke at a two-part we­bi­nar se­ries host­ed by the T&T Coali­tion of Ser­vices In­dus­tries and the Co-op­er­a­tive Cred­it union League last week said that cred­it unions must be seen as an im­por­tant al­ter­na­tive to banks and they should be used to lever­age sav­ings and used as a tool to make in­vest­ments.

He rec­om­mend­ed An­gel In­vestors step in to help busi­ness­es sur­vive. He praised NED­CO since they have more ex­pe­ri­ence in de­vel­op­ing SMEs.

The Cen­tral Fi­nance Fa­cil­i­ty (CFF)–es­tab­lished to serve the cred­it union in­dus­try by pro­vid­ing op­por­tu­ni­ties for in­vest­ments through pool­ing of re­sources to en­able high­er rates of re­turn–ex­plained to the Sun­day Guardian that tra­di­tion­al busi­ness­es have not sought cred­it unions for cred­it fa­cil­i­ties as cred­it unions are not al­lowed by the Co­op­er­a­tive So­ci­eties Act to lend to busi­ness­es as le­gal en­ti­ties.

How­ev­er, cred­it unions have grant­ed mil­lions of dol­lars to mem­bers to es­tab­lish and ex­pand their busi­ness­es.

“There has been an in­crease in busi­ness peo­ple ap­proach­ing cred­it unions for loans since COVID-19. This has cer­tain­ly been the case for the CFF. While the Gov­ern­ment has agreed to a pro­pos­al spear­head­ed by the Cen­tral Fi­nance Fa­cil­i­ty for cred­it unions to pro­vide loans to mem­bers for busi­ness ex­pan­sion and con­ti­nu­ity, through a one hun­dred mil­lion dol­lar COVID-19 Busi­ness Sup­port Fa­cil­i­ty, im­ple­men­ta­tion has not been fi­nalised as the cred­it unions are wait­ing for the agree­ments to sign."

In the in­ter­im, the CFF said 14 of its mem­ber cred­it unions have es­tab­lished an ini­tia­tive called "Project 2020" where cred­it unions will in­vest both debt and eq­ui­ty in­to non-fi­nan­cial co­op­er­a­tives with growth po­ten­tial.

“Spe­cial con­sid­er­a­tions will be giv­en to co­op­er­a­tives with ca­pac­i­ties to en­hance food se­cu­ri­ty, re­duce the im­port bill and in­crease for­eign ex­change earn­ings. The CFF is cur­rent­ly en­gaged in ne­go­ti­at­ing mem­o­ran­da of agree­ments with five such co­op­er­a­tives and is be­ing as­sist­ed by the Busi­ness De­vel­op­ment arm of the Com­mis­sion­er for Co­op­er­a­tive De­vel­op­ment.”

The CFF said it awaits the fi­nal­i­sa­tion of the nec­es­sary doc­u­ments and agree­ments to en­able the Cred­it Union COVID-19 Busi­ness Sup­port Fa­cil­i­ty to be im­ple­ment­ed as it has al­ready put all its mech­a­nisms in place.

Brian Manning, Minister in the Ministry of Finance.

Office of the Prime Minister

Man­ning:

Govt will look at re­lax­ing re­quire­ments to ac­cess loan

Min­is­ter in the Min­istry of Fi­nance Bri­an Man­ning in an email state­ment said that Min­is­ter of Fi­nance Colm Im­bert an­nounced that with re­spect to the SME loan fa­cil­i­ty, the banks have in­formed that a sig­nif­i­cant num­ber of ap­pli­cants could not qual­i­fy for the loan be­cause they did not have au­dit­ed fi­nan­cials, man­age­ment ac­counts, they were not up to date with VAT, NIS and in­come tax pay­ments.

He said the Fi­nance Min­is­ter has al­ready con­sult­ed with the Cen­tral Bank to de­vel­op an out­reach pro­gramme tar­get­ed for SMEs to get them to un­der­stand ba­sic re­quire­ments such as prop­er ac­count­ing for loan ap­pli­ca­tions. Ad­di­tion­al­ly, they will look at re­lax­ing the re­quire­ments to as­sist busi­ness­es to qual­i­fy and ac­cess the loan fa­cil­i­ty.

Man­ning al­so spoke about oth­er op­tions that small busi­ness own­er have who are fac­ing hard times.

On June 18, 2020, the Gov­ern­ment of T&T ap­proved a Small-Busi­ness Grant Fa­cil­i­ty for busi­ness­es with less than $1 mil­lion in an­nu­al rev­enues. NED­CO has been giv­en the man­date to man­age this grant fa­cil­i­ty which will be re­sourced with an al­lo­ca­tion of $30 mil­lion. Ap­pli­cants will be el­i­gi­ble for a max­i­mum grant of $20,000.

The $30 mil­lion Grant Fa­cil­i­ty ad­min­is­tered by NED­CO will be avail­able to small and mi­cro busi­ness op­er­a­tors with an­nu­al rev­enues of less than one mil­lion ($1,000,000.00) through­out T&T.

Man­ning added that NED­CO of­fers loans of up to $250,000 (TT) to qual­i­fy­ing Small and Medi­um-Sized firms. NED­CO has de­signed spe­cif­ic en­tre­pre­neur­ship train­ing pro­grammes for com­pa­nies like yours. The ob­jec­tive of this train­ing is to de­vel­op the core com­pe­ten­cies of not on­ly the busi­ness but al­so the in­di­vid­u­als be­hind the busi­ness.

No re­sponse from Bankers As­so­ci­a­tion

The Guardian sent the Bankers As­so­ci­a­tion of T&T (BATT) an email rais­ing con­cerns about the bank­ing sec­tor and what they have been do­ing to as­sist the busi­ness com­mu­ni­ty dur­ing this dif­fi­cult time, but there was no re­sponse up to late yes­ter­day.

Kerron Brown, President of the T&T Real Estate Association.

'Com­mer­cial prop­er­ty mar­ket on life sup­port'

Mean­while, Pres­i­dent of the T&T Re­al Es­tate As­so­ci­a­tion Ker­ron Brown who is al­so a re­al es­tate bro­ker at GenX Re­al­ty Ltd said there was “lit­tle ac­tiv­i­ty” in the com­mer­cial prop­er­ty mar­ket.

“The com­mer­cial mar­ket is on life sup­port. I have seen a lot of places come on the mar­ket for rent and while there are some brave en­tre­pre­neurs look­ing to open busi­ness­es at the time they are in the mi­nor­i­ty.

"You are see­ing some com­mer­cial land­lords putting their prop­er­ties up for rent or sale, but nei­ther has much ac­tiv­i­ty in San Fer­nan­do at least. In my opin­ion, COVID-19 has pushed us in­to the on­line meet­ing en­vi­ron­ment and we will nev­er re­verse this trend. The need for the com­mer­cial space will not go away but the sub­stan­tial­ly re­duced de­mand will send rental prices down and maybe send some land­lords in­to fore­clo­sure.”

Brown said he has not seen a great in­crease in com­mer­cial prop­er­ties be­ing put up for sale, how­ev­er.

“I just reached out to two of my col­leagues and their feed­back is that they are not see­ing a great in­crease in com­mer­cial prop­er­ties be­ing put up for sale but just an in­crease in com­mer­cial va­can­cies. I would al­so agree with this sen­ti­ment, but I think small­er com­mer­cial prop­er­ty own­ers who have mort­gages and are los­ing ten­ants may have to sell if this va­can­cy trend con­tin­ues, but time will tell.

"If the lock­down is ex­tend­ed past Ju­ly 4 or if we have an­oth­er wave of COVID-19 cas­es that caus­es fur­ther eco­nom­ic trau­ma, things will get worse.

"If you have sav­ings to ride the wave then you sit it out. If you don't then you try to sell.”

Brown be­lieves that banks are be­ing le­nient by giv­ing time to those they know can get back on track when things get bet­ter.

“The banks are con­ser­v­a­tive and have tak­en a more con­ser­v­a­tive po­si­tion since COVID-19 where per­ceived job sta­bil­i­ty is con­cerned. This means that some buy­ers who may have been qual­i­fied last year may not qual­i­fy this year. The im­pact of this on the mar­ket is sim­ple. Few­er buy­ers in a mar­ket­place with more prop­er­ties avail­able for sale push re­al es­tate prices down.”