The Economic Development Bank has a specific agenda it will follow to promote local small and mid-sized enterprises, including the creation of a training institute for entrepreneurs, agency President Luis Burdiel said.
During his participation in Wednesday’s “Private Enterprise and Government Forum” sponsored by the Puerto Rico Chamber of Commerce, Burdiel said the plan also includes loan guarantee programs and specialized loans.
“SMEs are an essential component of the Puerto Rico economy and our institution has as its north supporting its development through our guarantee and financing products,” he said.
Under the training institute initiative, the EDB will begin with its own employees, who will receive information from local and federal agencies focusing on “start-ups” as well as on loan refinancing and restructuring.
“Education should be ongoing and from now on the EDB will always be accompanying our entrepreneurs,” said Burdiel, who added that an important element of the training programs is strengthening the area of compliance with federal financing regulations.
Similarly, Burdiel mentioned that the EDB has in progress several loan guarantee programs both with the SBA and in-house. The use of funds to guarantee loans made by private banks will have the effect of maximizing their use and spur an increase in the loan approval rate for SMEs.
He mentioned that guarantee programs must include clear regulations that define the responsibilities of the originator, the steps to follow for recovery in cases of default, and the claims process.
“The importance of these programs is transparency on the availability of the guarantee fund and that these funds are restricted to the use of claims,” Burdiel said.
Another initiative presented Wednesday is the “Merchant Loans” program, which the EDB is developing for existing customers to try to minimize refinancing. The aim is to supply businesses with short-term cash flow.
Another aspect of the EDB’s formula is to provide flexibility in internal procedures.
“We have seen how many times, it is the banking institutions themselves who strangle business through slow decisions and disbursements,” the EDB chief said.
“You cannot do the same thing for 30 years. Today’s world requires us to be consistent pioneers and think big if we want to be great,” Burdiel said. “The attitude is the main factor, as well as the mentality to do things ‘right and correctly,’ not just what is legal.”
The EDB is one of the government’s main agencies the government has to spur the development of the island’s economy, promoting the private sector, primarily SMEs, with emphasis on manufacturing, trade, agriculture, tourism and services.