Government Guarantee s

April 2000 Table of Contents

GOVERNMENT-GUARANTEED LOANS

Owners of homes and businesses, including agricultural and fishery enterprises, that were affected by Hurricane Floyd may now be eligible to receive government-guaranteed loans under the Emergency relief Guarantee Fund Act of 1999.

One of the objectives of the act, which comes into effect in any disaster declared by the Minister responsible for Disaster Preparedness, is to assist persons who are unable to meet the criteria for regular loans. Homeowners may apply to approved lenders for loans of up to $50,000 with a repayment period of up to 20 years. Business operators may borrow as much as $75,000, repaying the sum within 10 years. Applicants must be at least 18 years old. The interest rate on loans for residential property will not exceed the prime rate, and the interest rate for business loans will not be greater than the prime rate plus one per cent. The prime rate is the rate banks charge their most creditworthy customers, and is now six per cent.

Under the act, the purposes of the loans must be to repair or replace occupied residential property, furnishings and appliances or businesses damaged or destroyed by a declared disaster, such as that caused by Hurricane Floyd. This includes rental accommodation, fishing boats, engines, farm buildings, farm equipment, citrus or fruit trees, vegetable crops, livestock, restaurants, pressing plants and other commercial enterprises.

Loan applications in respect of damage caused by Hurricane Floyd should be presented to approved lenders. The applications would then be forwarded to the Minister responsible for Disaster Preparedness for the loans to be guaranteed, Application forms are available at commercial banks.

Approved lenders include The Bahamas Development Bank, The Bank of The Bahamas Ltd, Barclays Bank plc, Barclays Finance Corporation (Bahamas) Ltd, British American Bank (1993) Ltd, CIBC Bahamas Ltd, Citibank NA, Scotiabank (Bahamas) Ltd and Workers Bank Limited.

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