90% of locally owned SME benefit from DDEC assistance
The Small and Medium Enterprises (SMEs) sector in Puerto Rico continues to represent the majority of companies seeking and receiving support from the Department of Economic Development and Commerce (DDEC, in Spanish).
In fact, during the first eight months of Fiscal 2023, 58 SME projects have benefited from several economic incentives, with a commitment of creating some 661 jobs, a $34.4 million payroll and a committed investment of $30 million.
According to the Business Intelligence Division of the DDEC’s Auxiliary Division for Strategic Sectors, during the 2022 calendar year, 86 SMEs received economic incentives through cash grants for a total of 1,176 committed jobs, a proposed payroll of $37.9 million and an investment in equipment projected at $61.3 million.
“We continue to assist and encourage small and medium-sized businesses to maintain and expand their businesses growth plans, while creating jobs and a better economic outlook on the island,” DDEC Secretary Manuel Cidre said about the assistance so that businesses can continue operating while facing global economic challenges.
For his part, DDEC’s Economic Intelligence Office Director Ángel Rivera stressed that 81 projects have committed to create 1,056 jobs with a proposed payroll of $34.9 million and an investment in machinery and equipment proposed of some $52.6 million.
This represents that 94.2% of the total of the promoted companies are of local businesses.
The secretary called on entrepreneurs to learn about existing programs that are aimed at guiding them to increase their chances of success and growth, as well as plan marketing strategies and raise capital to start their operations.
According to data published by the firm Birling Capital, 20% of businesses fail annually, 30% [fail] within two years and 50% close within five years.
Meanwhile, 42% of start-ups fail in the projected measurement of the business and 23% flop due to lack of financing.
“An example of these grants is the Seed Capital Matching Incentives Program, which offers capital of up to $10,000 per company,” Cidre said. “So far, 46 entrepreneurs have benefited from aid granted of $419,687.”
The program consists of matching funds for the working capital of small and medium-sized start-ups or those that have been established for less than 12 months. This incentive is intended to be used as capital for the day-to-day operations of the business, which may include equipment, machinery, tools, inventory and raw materials.
There is also the Machinery and Equipment Acquisition Program, which has helped 41 merchants with a total aid of $247,726.
“This incentive is aimed for the purchase of equipment, machinery, expenses related to process automation and resilience equipment needed for the operation of existing SMEs,” Cidre added.
On the other hand, Puerto Rico Innova, a program that benefited 100 participants in 2022 and has the same amount of interested participants in forming part of the 2023 edition, seeks to empower entrepreneurs to generate new ideas that promote business projects with high potential for expansion and development.
Another alternative is the E-Commerce Platforms Development Program to sell products and services electronically, in addition to the Digital Marketing Program that provides small and medium merchants with services aimed at developing marketing strategies in social networks or digital platforms. Last year this initiative helped 50 companies.
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