Help! Small businesses need urgent capital injection
Davon Crump, chief executive officer (CEO) of Global Outsourcing Solutions (GO Solutions) Ltd, believes that the Government must move to provide small and medium enterprises (SME) with the necessary business support services if it is to realise economic growth by 2030.
"I decided to invest in the business process outsourcing industry but was not able to convince any financial institution to offer credit because I did not have the necessary collateral," Crump told The Gleaner recently. "Too many profitable small businesses have had to close their doors because the support is not in place and as local investors in our own country, but this cannot continue if we are serious about the growth of the economy in 15 years."
Financial institutions demand key requirements such as a business plan, monthly cash flow projections, audited books of accounts, and a track record of the firm's banking transactions, which most SMEs cannot manage.
"From my personal experience, even when I had a contract in my hand from an international firm, I was refused, and I have been hearing similar stories from a number of young, ambitious entrepreneurs," Crump, the immediate past president of the Montego Bay Chamber of Commerce and Industry, continued.
No help from banks
"With our banks' bureaucratic procedures, most SMEs find themselves in an access-to-finance twist where they cannot give up, neither from looking for loans nor being able to put right what is required. Therefore, there must be an entity dedicated to helping our local investors no matter the size."
In a forum initiated by the Business Process Industry Association of Jamaica and held in Montego Bay recently, Dianne Edwards, president of the Jamaica Promotions Corporation, said, "There are local companies that come to us with their business projects daily, and we have been actively encouraging people who have business projects to speak to us so we can access how we can best help them, and that is not for foreign investors, that is targeted towards our local investors."
However, Crump does not share that view. "I have said this before publicly. If we had to depend on the state entities assigned to give support to investors, we would have sent home our staff and closed our doors."
Notwithstanding the challenges, GO Solutions persevered and is now moving to increase its capacity to 1,000 seats within the next 10 months after successfully landing contracts from some of the leading Fortune 500 companies in Canada, the United Kingdom, and the United States, including a recent five-year-partnership deal with Google-certified partner BrandRep.
"More local business means more employment, so there must be some form of incentives for local businesses," Crump added. "Our success was possible because we took a huge risk and borrowed at extremely high interest rates, but there are many out there who cannot afford to take such risk, but we had to do something as we could not just sit and watch our vision die."