The Jamaica Stock Exchange - Another Avenue To Grow Your Business
More Jamaican entrepreneurs are tapping into the Jamaica Stock Exchange (JSE) to grow and expand their product and service offerings.
According Neville Ellis, marketing and communications manager at the JSE, Jamaican entrepreneurs can look to the stock exchange for an avenue to raise capital to grow their businesses, recapitalise and retire expensive debt, and provide an avenue for estate planning, amalgamation, mergers and acquisitions, and other forms of business arrangements.
"The JSE is also a good and constant source of business valuation that also provides an avenue for employee involvement through Share Option Plans," Ellis said.
"For the Junior Market, it enables small companies to take advantage of certain incentives while growing their businesses. At present, the JSE allows for a reduction in listing fees, and the Government allows for a corporate tax incentive for five years, where companies that list on the Junior Market do not pay any corporate income tax for five years. However, conditions apply," Ellis added.
Depending on the nature of the business, the phase that the business is in - whether at the beginning, growth or matured phase - according to Ellis, a business or strategic plan is one of the tools used to determine capital requirements.
"There are two major ways to raise capital - debt or equity. In the former, you owe a financial institution and are required to repay the loan. It is, therefore, not considered permanent capital. Having spoken of financial institutions, this is not the only way to finance your business through debt capital. You could raise monies on the Exchange by way of preference shares or bonds," Ellis said.
Equity financing, he said, is another avenue which the Exchange facilitates. In this case, entrepreneurs can invite persons to be part owner or shareholders, thus sharing in the risks of the company and the profit when made.
"For companies who have never raised funds on the market, the process is through an initial public offering (IPO). The document, otherwise called a prospectus, sets out pertinent information on the companies and invites the public to buy shares (ownership) in the company," he said.
The JSE also offers to the public and players in the market its e-campus, where courses and workshops are offered in an attempt to keep the market fully educated and current and to promote financial literacy and inclusion.