Citing the scarcity of commercial loans from Virgin Islands banks with access to its loan guarantees and other financial vehicles, Gov. John deJongh Jr. wrote the region’s U.S. Small Business Association director this week, hoping ultimately to spur more commercial lending, according to Government House.
In the letter, deJongh thanked SBA District Director Yvette Collazo for her past and ongoing support of V.I. small business activity. As an example, he cited the recent announcement that a new surety bonding agency, which is participating in an SBA program, will begin bonding construction projects in the territory.
"The construction industry is one of our most important sectors in fostering small business ownership and employment and the access to bonding will only further the opportunities to the participants in this niche," deJongh wrote in his letter. [deJongh Letter to Yvette Collazo]
"I remain concerned about the absence of meaningful commercial loan activity by our local banks, and especially in accessing the vehicles made available by the U.S. Small Business Administration," deJongh wrote.
In the last year, from July 2012 to July 2013, local banks made $677,000 worth of SBA commercial loans in the Virgin Islands, a small improvement from the $435,000 loaned the previous year.
“These are dismal numbers,” deJongh wrote to Collazo.
For that reason, the governor requested a discussion with Collazo on how to achieve the strategic goals she laid out for the district, including increased use of the SBA to spur economic activity, a more targeted outreach to specific communities, educating credit unions on tools available to them, greater use of Certified Development Company loans and embracing nontraditional programs, such as innovation research.
“In order for our economy to grow, we need to ensure that our businesses have meaningful access to funding and, with the SBA indicating they are a willing partner, there is no reason more cannot be done. My administration embraces all of the SBA’s initiatives. We just need more to be done by our banks in terms of participation and providing the opportunities,” deJongh said.
Why would someone borrow from the SBA or a bank when the government makes loans that do not have to be repaid?
Loans by definition means there are plans to pay it back. With the government it’s more like help yourself cause we will borrow and over tax everyone else to make up what you take. I can only imagine what a place the Virgin Islands could have been if we only elected people with vision and didn’t hire people because they know or are related to somebody!
The governor is totally lost. Nobody in their right mind will start a business or incur additional debt related to their business given the price of energy here in the territory. This letter to the SBA is nothing more than posturing to give the impression that he’s sensitive to the hardships we’re experiencing. Hey Alana, the governor needs your know-it-all mentality right about now. Help him out, won’t you?