Frequently Asked Questions about Enterprise Growth Fund Limited
Is EGFL a Government institution?
EGFL is a joint public / private sector institution.
What role does Government play at EGFL?
Government provides the bulk of the funds used by EGFL to invest in businesses.
Does my business have to be incorporated to get funding from EGFL?
In most cases YES. However, the business does not have to be incorporated to apply for fund.
Will my information be kept confidential by EGFL?
YES. All information received by EGFL from applicants and clients is held in the strictest confidence.
How long does it take to get a loan/ investment decision?
EGFL strives to get investment decisions within 4 to 8 weeks after the receipt of an application. However, the actual time taken depends on the quality of information submitted by applicants.
What role will EGFL play in my business?
EGFL will function as a strategic partner providing, advisory services, access to our network of business contacts and clients and technical assistance in some cases. We do not get involved in the day to day management of your business.
What is the minimum and maximum available for investing?
Financing is available from $100,000 to $1.5 million.
How does equity financing work?
EGFL purchases a minority number of common and/or preferred shares in your business. The conditions of EGFL's investment are specified in a shareholders agreement. They include giving EGFL the right to be represented on the Board of Directors of the clients' company.
When preferred shares are purchased, EGFL usually requests an annual dividend ranging from 8% to 12.5% on its equity investments.
Entrepreneurs are given the first choice to purchase EGFL's shares in their companies at a predetermined time and minimum or fair market price.
Equity investments are for periods ranging from 5 to 10 years. The actual duration of the investments is determined by the cashflow dynamics of each project. Clients are given the option of redeeming EGFL's equity investment each year during the investment period.
How does loan financing work?
Loans are similar to regular commercial bank loans except for the following:
- All loans are calculated on a reducing balance basis;
- Interest rates are normally below the prime lending rates of commercial banks; and
- The maximum loan repayment period is 10 years.
How can my business qualify for funding from EGFL?
Your business must:
1) be incorporated to access equity funding. (This is not required to access loan financing).
2) demonstrate the potential to provide EGFL with an attractive return on its investment;
3) provide adequate security for any debt component of an application for funding; and
4) meet at least two of the following criteria:
a) have less than 200 employees;
b) have fixed assets valued at less that $1 million; and
c) generate between $100,000 and $7.5 million in annual sales.
What is the procedure for applying for funding?
Applications for funding should be presented in a well prepared proposal. The proposal should include:
- information on the company's financial and management structure;
- strategic plans (including marketing plans) for the next 3 to 5 years;
- current and/or most recent audited financial statements, and
- realistic financial projections (balance sheets, income and cash flow statements) for 3 to 5 years.
NEW SMART FUND ESTABLISHED
Funding available for renewable energy and energy efficiency projects in Barbados!
EGFL is now ready to receive applications for the Pilot Consumer Finance Facility.
