Poor record-keeping stops businesses from getting loans
Executive member of the BVI Bank Association Joy Penn has revealed that poor record-keeping is one of the major factors that stop many small businesses from accessing the loans they need from local banks.
Penn said many small business owners don’t have a culture of separating personal records from their business records, adding that all the banks are having a challenge with this area.
“I would also admonish persons who are considering going into a small business to look at their record-keeping — that’s probably the number-one challenge that we (banks) all have in common. Keep a separation of personal and business funds, you can’t co-mingle your personal and business funds. You’ll never know if you’re coming or going as it relates to your business success and that’s a very common mistake,” Penn explained.
She said this issue is one of the many that banks will address at the BVI Business Banking Expo slated for June 6. The event is being organised by the Ministry for Financial Services, Labour and Trade and will bring together financial institutions, regulators, business owners, and entrepreneurs from across the territory.
Penn also said the banks will not be competing for customers at the Expo but will be focused on educating entrepreneurs about the products and services they can access.
The Expo comes amid complaints from businesses and residents who say they are treated unfairly when accessing financial products and services offered by local banks.
Minister Lorna Smith also said the event is aimed at fostering better communication between small businesses and local banks, so entrepreneurs can get better access to the financing they need.
Smith also said financing was the number-one challenge entrepreneurs highlighted when she had a series of meetings with them in 2023.
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Do persons really admonish in the 21st century?
We want entrepreneurs but we don’t teach them the necessary skills to be successful. It’s not a difficult process but it requires discipline. No business can be successful in the long run without proper book-keeping. Not teaching these kinds of skills also means that employers are not likely to have adequate records in terms of withholding for taxes and NHI contributions, in turn meaning diminished monies flowing into the tax system. No paperwork means no accountability. It’s a mess
Just like the government.
Exactly.. Starts at the top…
Having a Trade License doesn’t make someone a business person, this is where the problem lies. Far too many people think business is just a simple formality and easy. We need proper busines courses from our Primary School level so that by time the kids graduate High School they have a basic understanding of the principles of business in general.
Look at the Leadership of the country
Priorities are not in place
How do you expect to pass on the skill.
Two festivals in one year
No accountability if the first boogie woogie brought in dividends for the government. Where is the paper work to show
No food increase from the Fishers and Farmers stimulus package
Where is the paper work
Every man feels they are a demi god unto themselves. The Premier thinks he is untouchable. He does not listen
See the diaster at Joe’s Hill
Leaders must lead
I aggree we overlookery
Basic things
The problem is much bigger and more complicated than record keeping, although a very important part of the problem. It starts with education and lack of education about doing business in the BVI coming from the trade department, but that can be challenging considering that many that work in that department have no experience owning a business so they themselves would have to be educated on the many challenges business owners face today. Many think that just by having a trade license they are in business. Once a trade license is received, it is noy registered with inland revenue NHI or Social Security until the try to open a bank account in the business name. No checks or enforcement to ensure that businesses are actually operating within the law. Money coming in, money going out with no considering if the business is actually making a profit. Using the money earned by the business as your personal cash cow. Bringing in unskilled employees from abroad because they work cheap without considering if the business can actually afford to pay someone from outside to live here and and if cheap workers are the best for small businesses just starting out. There is also a whole governmental and legal liability that is not considered. If government enforced their laws and policies today I think about 70% to 80% of these small businesses would loose their licenses and that creates a whole other problem because you are not allowed to close without paying what is owed.
I recall more than thirty years ago sharing a friendly drink with a local businessman. He had just been refused a business account at a Road Town Bank and was very upset. Apparently the manager had demanded financial references before opening an account. When my friend then put his hand in his trouser pocket and pulled out $20.000.00 rolled up in 100 dollar bills he could not understand why the manager refused to accept the money as a reference.