Government Guaranteed Loan Scheme for Medium- and Large-Sized Businesses
The Ministry for Finance and Economic Development is pleased to inform the public that the Government of the Cayman Islands and five (5) local financial institutions (“the Banks”) have agreed in principle to a government-guaranteed loan scheme to assist medium and large-sized businesses with meeting their operating and capital expenditure and refinancing debt needs.
Legislative Assembly has Approved Loan Scheme
On 14th October 2020, the Legislative Assembly approved that a Government Guarantee could be issued with respect to a loan Scheme for Medium and large-sized businesses.
Loan Applications can be Made for
Medium and large-sized businesses can apply to five (5) local Class A licenced banks for loans to assist with:
- Operating Expenses;
- Capital Expenditures; and
- Re-financing of Debt.
Definitions of Medium- and Large-sized Businesses
A medium-sized business is defined as a business employing from 13 to 50 employees or it has gross revenue of Cl$750,001 to Cl$5,000,000;
A Large-Sized business is defined as a business employing over 50 employees or it has gross revenue of over Cl$5,000,000;
To be eligible to apply for loans, businesses must be at least 60% Caymanian-owned.
Maximum Amounts that can be Borrowed
The maximum that each medium and large-sized business can borrow is up to Cl$750,000 and Cl$3,000,000, respectively.
Terms of the Loan
The interest rate= Cl Dollar Prime Rate plus a Margin of 1.5%.
As the Cl Dollar Prime Rate is currently 3.25%, the interest rate that applicants would face would be 4.75% per annum.
The maximum loan period is 7 years.
There is a 1-year moratorium period with respect to principal repayment and interest payments to make "life easier" for businesses in the first year of the loan.
Size of the Loan Scheme and Extent of Government Guarantee
The five (5) local Class A banks have agreed to make available a total of Cl$200 million to medium and large-sized businesses.
The Government Guarantee will cover 50% of the loan approved by a bank and, it may be the case that applicants may be asked by banks for some security for the remaining 50%.
Banks Participating in Loan Scheme
The five (5) participating banks are:
- Butterfield Bank;
- Cayman National Bank;
- FirstCaribbean lnt'I Bank;
- RBC Royal Bank; and
- Scotiabank & Trust.
Should your medium or large sized business benefit from the Government Guaranteed Loan Scheme, please reach out to one of the five (5) participating banks for a loan application.