‘Not entitled’ to start-up funding
Access to start-up capital remains one of the major challenges for a number of aspiring entrepreneurs on the island. And economist Jeremy Stephen says while he believes more poeple will venture into entrepreneurship, and that funding is widely available through financial institutions, it is a matter of people forming the right partnerships, finding the right sources for funding, and having a sound business plan.
“It is just a matter of seeking key relationships, including online [and], being able to identify those sources of finance,” Stephen has advised. “The money has not disappeared. It is just that it is not moving to the old sources it used to, and the reality about entrepreneurship is that everybody will not get funding. It is the luck of the draw kind of game.
“So you are not entitled to funding just because you have an idea. You have to come up with the most compelling case as possible, and then possibly funding comes when you need it,” he explained.
Stephen told Barbados TODAY that while he was aware the commercial banks were seeking to help entrepreneurs, he did not expect them to become any more “relaxed” in lending, given the current economic climate and the associated risks.
“The fact remains that incomes have fallen and people are going towards non-traditional sources of seeking income. It provides for an environment where it is more risky than a couple years ago to lend,” said Stephen, adding that some financial institutions were “waiting to see” what would happen in the economy and so were being a little more selective in their lending.
“So at the end of the day, I don’t expect the commercial banking sector to go full gusto into start-up funding. Actually, it would be very risky. That is your life savings going into start-up funding when the banks are least able to manage that risk at this time,” he added.
Stephen said such a situation provided an opportunity for venture capital and other non-traditional forms of financing.
It is widely beleived that as the country continues to experience little growth, resulting in the restructuring of private and public sector companies, more people will turn to opening their own businesses. Stephen said that, based on the local and international economies, either more people would turn to entrepreneurship over the coming months in order to survive, or seek opportunities in other countries.