Small businesses benefit from over $51M in grants

MICRO, small and medium-sized businesses have felt the brunt of the novel coronavirus (COVID-19) pandemic, but some entrepreneurs were able to ‘cushion’ the severe effects with financial aid from the Small Business Bureau (SBB), which has so far disbursed over $51 million in grants.
Reduced spending in the local economy, which has been constrained by the necessary COVID-19 prevention measures, has erased any semblance of ‘decent’ profits which would have been recorded by businesses prior to the dreaded pandemic.

Small businesses are often referred to as the lifeblood of any economy because they give entrepreneurs the opportunity to create meaningful jobs and foster local economies, allowing money to stay closer to communities.

And, throughout the world, many persons have gone out of business because of extended ‘lockdowns’ caused by the COVID-19 pandemic. This has been the case in developed nations, so the effects on Guyana — a nation with a Gross Domestic Product (GDP) of just about US$4 billion — are understandably harsh.
The SBB, in doing its part to ensure that businesses are able to navigate the pandemic and stay afloat, has disbursed over $31 million in regular grants to 158 persons and over $20 million through a special “COVID-19” relief grant to over 137 businesses.

Businesses, from both categories, were able to access up to $200,000 from the SBB once they met a certain criteria, said Chief Executive Officer (CEO) of the SBB, Dr. Lowell Porter, in an invited comment to the Sunday Chronicle.
Those grants are intended to serve as a stimulus for small businesses to stay afloat and can be used to offset expenses, pay staff, purchase supplies, among other things.

The Guyana Chronicle had reported that the aim of the bureau’s initiative was to strengthen and sustain small businesses, through the provision of relief grants to sustain business operations and retain employees, along with training and development support to establish and market businesses through online platforms, diversify businesses and forge supply partnerships.
The bureau had recently conducted an online survey which received 243 responses from small businesses. And, of those responses, 63 per cent had indicated that they had to close completely because of the pandemic.

In recognising the importance of this aspect of the commercial sector, the government has allocated $100 million to the Small Business Development Fund, which is managed by the SBB.
The bureau already has approximately 10,000 businesses in its database, and the development fund will create an opportunity for prospective small business owners to access loans and grants.
Although businesses are able to leverage this support, once they satisfy the requisite criteria, the gradual reopening of the economy has released the ‘stranglehold’ created by the COVID-19 pandemic, allowing businesses to increase their profit margins.

The government has taken steps to rejuvenate ailing sectors and restore stability, but has maintained focus on safeguarding the health of every Guyanese through various control measures.
Among some of the resuscitative measures are the reopening of the country’s international airports; the reduction in the hours of the national curfew; extension in the time for businesses to operate; and the authorisation for businesses to operate in a safe manner, although at half of its regular capacity, in some cases.

REORGANISING
Businesses have been responding well to those resuscitative measures, and, according to Dr. Porter, they are now reorganising themselves to “bounce back.”
“It is not going to be an easy task because a lot of them have lost a lot, so it would be hard for them to get back to some semblance of production or productivity. It will take them a while,” said the CEO, adding that the rate of recovery “boils down” to the recovery of the general economy.
The economy, he reasoned, has to grow in order for businesses to grow. There must be a demand for goods and services, but, considering the economic existing conditions, that demand does not exist.

“The spending power of people is not available immediately…I do not know if we will see a real robust resurgence before the end of 2020,” said Dr. Porter.
President Irfaan Ali, in outlining measures included in Budget 2020, had said that the government, after re-prioritising and re-programming fiscal measures, has managed to add $20 billion in relief to the “pockets” of Guyanese at a time when the nation is faced with the effects of COVID-19, and the recently-concluded protracted electoral process. The conduits of relief include revised tax measures and sweeping incentives.

The broad objectives of those measures which feature in government’s emergency budget are to stimulate economic activity; get persons back to work; increase Guyana’s productive capacity; reduce the cost of doing business; improve efficiency; and facilitate growth and development of businesses.
Despite the implementation of those measures, there will not be an immediate spike in economic activities, but Dr. Porter is optimistic that 2021 will be a better year.
Available information shows that Guyana is fast becoming a business magnet, attracting major foreign and local investors who are keen on pumping money into this fledging Petroleum State, which is anticipating an “economic boom.”

Hoteliers, agro processors, key players in the global energy sector and many other investors are either already in Guyana or are interested in penetrating the country’s growing economy.
In order to capitalise on the impending development, small businesses would have to assess their current position and reposition themselves, if need be, to effectively satisfy the increasing demands.

“What we would need to ask is would they have capacity or do they have the financial and capital resources,” said Dr. Porter.
Those areas need to be analysed before small businesses can benefit or become part of Guyana’s economic ascension.