3 banks to participate in small business credit program

  Three commercial banks have already expressed their willingness to participate in the State Small Business Credit Initiative program, according to Commonwealth Development Authority loan manager Oscar C. Camacho yesterday.

Speaking to members of the Saipan Chamber of Commerce at the Kanoa Resort in Susupe, Camacho said this program is being pushed by CDA and the Department of Commerce to support the islands’ growth and economic development.

He said First Hawaiian Bank in Guam, Bank of Guam, and Bank of Hawaii are the latest commercial banks that informed CDA of their wish to get involved and help residents set up their own businesses.

It was also disclosed that two other banks-First Hawaiian Bank-Saipan and the Bank of FSM-will not be participating in the program, citing the many challenges on island.

The CNMI was approved a $13.1-million funding from the U.S. Treasury to jumpstart the State Small Business Credit Initiative program. The first of three disbursements amounting to $4.3 million has already been received and is ready to be loaned out to interested borrowers.

Under the program’s condition, the $13 million must be expanded to $130 million in five years-a requirement that Camacho described as a big challenge but possible to achieve.

Camacho explained that “everything is bank-driven” when securing a loan under the State Small Business Credit Initiative program. That means all decisions, requirements, interest rates, approval and others entirely depend on the lender-the banking institution.

The loan application itself is directly submitted to the bank. CDA and the Commerce Department, according to Camacho, will serve as support system in the process but will not guarantee the loan’s approval.

In order to qualify as a borrower, applicants should not be a sex offender. Also barred from applying are casino businesses, insurance companies, lending corporations, and credit unions, among others.

The main requirement for a business applicant is to be a U.S. citizen.

Role of CNMI SBDC

CNMI Small Business Development Center director Perry A. Inos Jr., who was among the guest speakers in yesterday’s Chamber of Commerce meeting, shared the important role of his office in ensuring the success of every business on island.

Among initiatives it offers are counseling programs, small business training programs, small business resource/assistance center, and community/village outreach programs.

In these trainings, SBDC will provide knowledge on how to start a business, how to write a business plan, how to manage a business, and how to market the business, among others.

According to Inos, businesses succeed because of their clear sense of purpose and base their plans on realistic expectations on what they can achieve. These companies also understand their strengths and weaknesses relative to their competitors and know how to build strong and enduring business relationships. Before opening, these businesses develop a clear, thoughtful, written business plan that identify potential rewards but also prepare for probable risks.

Factors in the failure of a business include poor planning, not enough capital, lack of prior business experience, poor marketing, ignoring the competition, poor customer service, and getting the business plan wrong.

By Moneth Deposa
Reporter