The Economic Development Bank (EDB), the lending arm of the Virgin Islands Economic Development Authority (VIEDA), continues to positively impact the territory’s small business community by providing enhanced avenues to financing and capital through the federally-funded State Small Business Credit Initiative (SSBCI) 2.0 program, as well as local loan programs.
During the first quarter of Fiscal Year (FY) 2024, EDB leveraged its relationship with lending partner FirstBank Puerto Rico (FirstBank) to successfully close the first two State Small Business Credit Initiative 2.0 loans in the territory. The State Small Business Credit Initiative program aims to bolster small businesses by facilitating access to critical capital for investment to spur job creation as the country recovers from the COVID-19 pandemic. Through its loan guarantee and collateral support programs, the State Small Business Credit Initiative mitigates risk for banks, thereby fostering a more robust lending environment.
These two transactions generated loans with FirstBank totaling $910,000 with the State Small Business Credit Initiative 2.0 program providing $493,250 in loan guarantees. This guarantee support is anticipated to fortify two businesses—one a St. Croix-based restaurant and the other a St. Thomas fishing supply operation—potentially retaining 14 jobs and creating eight new employment opportunities in the territory.
Wayne L. Biggs Jr., chief executive officer of VIEDA, affirms, “Our purpose is to support and develop our local business community. Access to State Small Business Credit Initiative 2.0 funding opens a wealth of exciting opportunities for small businesses and directly translates to job creation and sustainability for our residents, enhancing our tax base. Reinvigorating our relationships with local banks is key as we participate in the second round of the SSBCI program on a significantly larger scale than we did with SSBCI 1.0.”
Due to EDB successfully managing $13.1 million in SSBCI 1.0 funding, which impacted 43 USVI businesses, created 213 jobs and retained 479 jobs, the U.S. Department of the Treasury (Treasury) awarded $57.5 million in SSBCI 2.0 funding for the territory in February 2023—four times the amount of its predecessor. VIEDA will continue its outreach with the territory’s local banks to get the funding to businesses as quickly as possible.
Michael Basden, commercial business manager at FirstBank, emphasized the bank’s commitment, saying, “FirstBank is pleased to continue its partnership with VIEDA on this initiative. We have participated in the SSBCI program in the past, and the considerable increase in funding and products available through SSBCI 2.0 affords a higher level of flexibility and assurance as we continue to assist USVI small businesses.”
Beyond loan guarantees, SSBCI 2.0 includes three additional programs in the territory—collateral support, loan participation, and payment, surety, and performance bond programs. VIEDA is also seeking to augment the State Small Business Credit Initiative financial programs with technical assistance (TA) that can help with legal, accounting, documentation, and other issues that impact a business’s creation, development, or operations. An application for a State Small Business Credit Initiative technical assistance program is currently under review by Treasury.
Looking ahead, two more approved transactions, representing over $1.9 million in FirstBank loans with more than $987,000 in State Small Business Credit Initiative 2.0 guarantee support, await to be closed. These transactions have the potential to create 25 jobs. Six additional State Small Business Credit Initiative loans are in the pipeline and will be presented to the VIEDA board once the applications are deemed complete.
In addition to its SSBCI initiatives, EDB remains dedicated to supporting USVI businesses through its other loan products. In FY 2023, five businesses received EDB loans totaling $1,187,500. The loans received by those businesses helped to create 23 jobs and retain eight. This fiscal year has already seen support for seven businesses, demonstrating EDB’s ongoing impact on the territory’s economic growth.
To learn more about the State Small Business Credit Initiative program or Economic Development Bank’s other loan programs visit www.usvieda.org or contact info@usvieda.org.
