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Charlotte Amalie
Friday, March 29, 2024
HomeNewsArchivesLocal Businesses Have Advantage Selling to EDA Companies

Local Businesses Have Advantage Selling to EDA Companies

Locally owned businesses can get in the door first to supply companies receiving V.I. Economic Development Authority tax breaks if they get on EDA’s list of eligible suppliers, EDA officials told businesspeople at a St. Croix Economic Development Initiative business forum in Frederiksted Wednesday.

Speaking to an audience of about 20 at Pier 69, EDA Applications Director Margarita Benjamin said, "Most residents see EDA as providing opportunities only for big businesses." But EDA can help small, local businesses through loans, loan guarantees, collateral support, tax breaks for setting up in enterprise zones and in other ways, like directing business their way, she said.

EDA "encourages to the greatest extent the use of local goods and services," as a condition of receiving tax breaks through its Economic Development Commission and Enterprise Zone Commission, Benjamin said.

"Our agency certifies local businesses to be placed on a list of suppliers for EDA beneficiaries," she said. Companies can then select businesses off that list and know that they meet EDA requirements.

Some businesses have said they just cannot compete with larger retailers like Kmart and Home Depot, she told attendees. But that is a canard and an excuse as those and other large companies cannot qualify as local businesses on the eligible supplier list because they are not locally owned, Benjamin said.

Companies getting tax benefits are required to advertise twice a year for goods and services they will use on an ongoing basis, she said, encouraging businesses to look at what they need and think about preparing to provide it.

"What I say to the individuals who come to our office is this is an opportunity," she said. "Go to the newspaper, see what they need and see if there is an opportunity to go into business in that particular area," she suggested.

To get onto their list of eligible suppliers, companies need to have been in business for at least one year, its owners must principally reside in the territory and they must submit copies of their tax returns, Benjamin said.

Abraham Edwards, an EDA small business credit specialist, said the authority has close to $15 million in federal funding available right now to provide partial guarantees and collateral support for small business loans.

EDA cannot lend the money directly to borrowers; it has to partner with commercial banks, supporting their loans, he said. They can provide up to half the loan amount as collateral support and can guarantee up to 10 percent of the loan amount, he said.

So far about $1.3 million of that sum has been committed and the EDA wants to see much more, Edwards said.

"It is working but we need more cooperation with the banks," he said, echoing concerns about a lack of interest in lending that EDA officials referenced in recent Senate hearings. (See related links below)

His office has been meeting with local banks to try to get the message out about the loan guarantees, but often the final lending decision is being made off-island, by bank officials who may have no knowledge at all of these loan supports, he said.

Edwards said that while he is trying to raise awareness among local bank officials and get them to prod the home offices, he also urges business owners seeking loans to ask their banks specifically about EDA and SSBCI loan supports.

"Please help us spread the word we have this money available. When you approach your bank to request a small business loan, let them know you are aware of the program and insist they use it to help you," Edwards said.

For more information on the EDA’s lending program or the V.I. State Small Business Credit Initiative, you may contact the lending division on St. Thomas at 340-714-1700 or on St. Croix at 340-773-6499.

The talk was put on by the St. Croix Economic Development Initiative, whose business forums are scheduled for every second Wednesday of the month at Pier 69 at 5:30 p.m. To learn more about the St. Croix Economic Development Initiative, visit www.vibusinesstv.com or email Anthony Weeks at ataweeks@kalalloo.com.

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