“Now is a good time for entrepreneurs and small business owners to consider debt consolidation. Renegotiating the terms of your loans can result in reduced monthly rates, longer repayment times and lower interest rates to assist your business during this challenging time,” advised Dino Hinds, chairman of the Micro Financing Group. Hinds was speaking during a debt and asset management panel discussion alongside Hilary Reid, Partner – Myers, Fletcher & Gordon, attorneys-at-law during the recent C&W Business Jamaica small business webinar titled, ‘Strategies to Sustain Your Business in 2020 and Beyond’.

Hinds encouraged business owners to consider all the funding opportunities before engaging a lending institution. “Times have changed. Small businesses are now able to access equity and mezzanine [a hybrid of debt and equity financing] to finance their business. Debt is no longer the only option,” he said.

The investment banker also implored businesses not to take on debt simply because it is available. “Debt is not a bad thing [but] it must be managed wisely. Also, if possible, only assume debt to acquire assets which will increase the earning power of your business,” Hinds added.

As the business owners were introduced to the range of opportunities available for debt and asset management, Hilary Reid, Partner – Myers, Fletcher & Gordon, attorneys-at-law, also cautioned the attendees to do their research before approaching a lender or entering into any agreement.

“It is important to conduct the research and be fully prepared before a meeting with your bank. Review all your collateral, obtain your credit report, have certified copies of your business registration certificate and TRN. Also, be clear on what you intend to do with the loan and how much you require. This will put you in a better negotiating position,” stated Reid

She continued, “Small business owners must carefully read all financial documents and understand their obligations as a borrower, and the impact that it may have on their business before signing. For example, you must be clear on what will trigger the lender to enforce against you in the event of a default when accepting a new business loan or consolidating debt and consider how the loan will affect your financial position going forward.”

The parting debt management advice to business owners was to put all their business through their bank account. “Among small businesses which do not have an accountant, the temptation is there to conduct numerous cash transactions because it is less hassle instead of going through the bank. If you do, you may be limiting your loan opportunities. Lending institutions often use cash flow to decide whether a business can repay a loan and may even offer you a line of credit without you making the request,” shared Hinds.

Other webinar presenters included Sandra Samuels, CEO – Totally Male; Metry Seaga, past president – Jamaica Manufacturers Association; and Romain Lovindeer, Solutions Architect – C&W Business Jamaica.