In a financial system largely built around proven revenue and creditworthiness, Jamaica Business Development Corporation (JBDC) is calling for a shift in how start-up businesses are supported, one that prioritises funding first and financial track record later.

The agency is pushing for new grant-based and blended financing tools that support entrepreneurs before they are profitable, arguing that the current model rewards maturity but stifles innovation. While mid-stage micro and small businesses can now access a growing pool of capital, start-ups operating at the concept or validation stage remain locked out, JBDC Acting CEO Harold Davis said.

“Access to finance has two sides of the coin, and that is the appropriateness of the financial product that is available,” he said in a recent press statement. “When I say appropriateness I speak of the product that is right for the particular industry or the particular stage of business of the entrepreneur.

“For instance, credit financing is perhaps not the best form of financing for a start-up. Credit financing is most appropriate when the entrepreneur is scaling… having had that proof of concept,” he continued.

Instead, he notes that venture capital, angel investment networks, and blended finance models could be powerful tools to fill this void for idea-stage ventures that lack collateral, financial history, or revenue.

The JBDC, which does not disburse capital directly, plays a brokering role — helping entrepreneurs formalise their business structures while engaging banks and public institutions to rethink financial products.

While financing to JBDC-assisted entrepreneurs more than doubled to $200 million in the past fiscal year, Davis said much of that progress bypassed Jamaica’s earliest-stage businesses, which remain ineligible for most mainstream lending programmes.

One of the clearest expressions of this new thinking is the Growth and Expansion of MSMEs through Innovation and Capacity Building (GEMINI Grant Programme), a collaboration between JBDC and the Development Bank of Jamaica (DBJ), designed to support entrepreneurs in the pre-scaling phase.

The programme provides non-repayable capital and technical support across JBDC’s business pipeline — from business model development and strategy to branding, pricing, and pitch preparation.

“We have conversations with various financiers. We have conversations with the DBJ. Out of those conversations came the GEMINI product, for instance,” Davis said. “We have conversations with Sagicor Bank, Access Financial Services, and others to make sure that they can understand the nuances and the vagaries, sometimes of the entrepreneur, to design appropriate products for them.”

GEMINI will support the hand-holding of 100 clients in the nursery, incubator, accelerator and scale-up community programmes at JBDC.

However, such financing tools remain the exception. For the majority of funding programmes currently available, a minimum revenue threshold — typically $2 million — is required to qualify.

“They need to be operating for at least a year and have some financial information demonstrating that they’re operating,” manager of JBDC’s Business Advisory Services Unit Melissa Barrett said of some of the JDBC’s existing programmes. “Probably achieving revenue levels of at least two million [dollars] is a problem in itself. It’s not open to everyone.”

Barrett sees the greatest opportunity for reform in micro-grant tools targeted at young innovators, especially those emerging from Jamaica’s university system.

“JBDC has the Small Business Development Centre Network embedded in it where students coming out of these universities want to start businesses,” Barrett said. She added that financiers could consider funding these individuals — even in small amounts — to test their ideas.

The agency believes more early-stage interventions like GEMINI will be critical in meeting the Government’s broader economic goals around job creation, innovation, and export diversification.

— Karena Bennett