| Name of Product: | ‘FRF Loans’ Loan Plan |
| Description of Product: | This loan product provides financing to Individuals, Small Forest Sector Operators, Community Logging Organizations, Small Concession Holders/Producers and Large and Mid-Size Concession Holders/Producers and Sawmillers, Large and Mid- Size Kiln Operators; to support the strengthening of the forestry sector. |
| Purposes to be financed under the Facility: | · Start ups · Logging · Sawmilling · Acquisition of Machinery and Equipment · Value added activities · Expansion (Capital Works) · Working Capital |
| Target Groups | · Individuals · Registered Businesses · Registered Associations /Cooperatives/ Community Logging Operations · Registered Companies P.S. Must be operating in the Forestry Sector as defined below. Registered entities/companies must be 75% Guyanese owned. SMALL BUSINESSES · A Guyanese Citizen or a Cooperative/Business/Association/Company where ownership is 75% Guyanese. · Required to be legally incorporated and, · Must meet any two of the three following criteria: I. Employ not more than Ten (10) persons; II. Gross annual revenues of not more than G$30,000,000 III. Total business assets of not more than G$20,000,000 MID-SIZE AND LARGE BUSINESSES · Be registered or incorporated as a business, partnership, cooperative society/association/ company, or holding company with the Deeds Registry or relevant authority and where ownership is 75% Guyanese. · Must meet any two of the following three criteria: I. Employ above 10 Persons II. Gross annual revenues exceeding G$30,000,000 III. Total business assets exceeding G$20,000,000 |
| Interest Rate: | · An interest rate of 4% per annum be applied to these loans P.S. Interest accrues daily on the reducing balance and will be applied on the 7th day of the new month. |
| Equity: | 15%-22% equity contribution to be provided. |
| Applicable Fees: | · Loan processing -fees waived · Prepayment – fees waived · Credit Info Check -$2,000 · Site Inspection Fees –to range between $5,000 to $20,000. Dependent on location and subject to the Bank’s management discretion. · Legal fees which includes filing fees and lawyer’s fees will be applied. This amount is subject to the value of the loan. I. Lawyer’s Fees – 1% of the loan amount Filing Fees – Subject to the value and type of legal document offered. These fees are remitted to the Deeds Registry and are calculated based on fees guidelines outlined by the Deeds Registry. |
| Lending Limits | Up to $20M Individuals/Small Businesses/Associations/Cooperatives · Small Forest Sector Operators · Small Concession Holders/Producers · Community Logging Operators Up to $30M Mid -Size and Large Businesses/Companies · Mid and Large Size Concession Holders/Producers · Mid and Large Size Concession Holders · Mid and Large Size Sawmillers · Mid and Large Size Producers and Sawmillers · Mid and Large Size Kiln Operators Above $30M To be evaluated based on Business Proposal and number of beneficiaries |
| Credit Enquiry: | Credit Info checks to be done |
| Repayment Terms: | · Moratorium of 1-6 months on payment of principal to be offered as may be required and warranted. Interest must be serviced on a quarterly basis. · Maximum loan period – 84 months (7 years) · Waiver of prepayment penalties P.S. Payment cycle to match revenue cycle. To be monthly, quarterly, half yearly, annually. |
| Security: | The loan value should not exceed at least 60% of the collateral value. Acceptable collateral includes : Primary forms of Collateral · Cash · Mortgages · Debentures Supplementary Collateral as may be requested · Bills of Sale · Assignments of Salaries/Contract Proceeds /Shares · Assignment of Fire/Life/Stock Insurance · Guarantees · Promissory Notes *Exceptions to be allowed by Bank’s Management |
| Eligibility Criteria | · Must be engaged in a forestry sector related activity · Must possess a valid Concession Agreement, Sawmill License or other Timber Dealer Licenses. · Required to be an individual or a legally registered/incorporated business, partnership, private limited company, association, cooperative society or holding company with the Deeds Registry or other legally designated body. · Must be a Guyanese Company or 75% owned by Guyanese · Pre-Screening Loan Summary to be provided by the Forestry Revolving Loan Fund Committee (FRFLC) · Must be in good standing – this includes payment of fees or an agreed payment schedule/plan with the Guyana Forestry Commission (GFC), |
| Points of Lending: | Points of Lending: |
| Marketing: | · Promotion of Launching of FRF Loan Program when first ten (10) loans approved · To be done by both the Government and the Bank via the print, electronic and social media platforms, outreaches, expositions, etc. · Promotional material to be used to market the facility-brochures, flyers, etc. |
| Requirements | By the Bank Requirements for Individuals[1] · Valid National Identification Card or Passport or Driver’s License for each applicant · TIN Certificate for each applicant · Recent Proof of Address for each applicant · Financial Statements (Previous three years) · Cash Flow Projection for the next twelve months · Application indicating purpose of financing, along with supporting documents such as quotations and estimates. · Bank Statement from Current Bank (Minimum one year) · Copy of Transport / Title of property offered as collateral · Valuation of Property · Relevant Licenses/Permits · Detailed Statements on all existing liabilities, if any, indicating payment history for the past three (3) years, payoff balances and maturity date. · 15-22% equity contribution Requirements for Registered Businesses/Associations/Cooperatives[2] · Valid National Identification Card or Passport or Driver’s License of each registrant. · TIN Certificate for each registrant · Recent Proof of Address for each registrant · Business Registration/ Registration under the Friendly Societies Act/ Cooperative Societies Act · Trust Deed/Rules of Association/Constitution for Association/Cooperative · Financial Statements (Previous three years) · Cash Flow Projection for the next twelve months · Business Plan / Application indicating purpose of financing, along with supporting documents such as quotations and estimates. · Bank Statement from Current Bank (Minimum one year) · Copy of Transport / Title of property/Vehicle Registration offered as collateral · Valuation of Property · Relevant Licenses/Concession Agreement · Detailed Statements on all existing liabilities, if any, indicating payment history for the past three (3) years, payoff balances and maturity date. Requirements for Companies[3] · Valid National Identification Card or Passport or Driver’s License of all Directors · Recent Proof of Address for each Director and the Company · TIN Certificate of Company and for each Director · Certificate of Incorporation · Memorandum of Association or Articles of Association · Certificate of Good Standing · Annual Return (Previous two years) · (Audited) Financial Statements (Previous three years) · Cash Flow Projection for the next twelve months · Business Plan / Application indicating purpose of financing, along with supporting documents such as quotations and estimates. · Bank Statement from Current Bank (Minimum one year) · Copy of Transport / Title of property offered as collateral · Valuation of Property · Relevant Licenses/ Concession Agreements · Detailed Statements on all existing liabilities, if any, indicating payment history for the past three (3) years, payoff balances and maturity date |
| Interviewing: | · Interviews for applicants to be conducted at any of the bank’s branches. · The credit officer will complete the application form with input from the applicant using required information/ documentation and pre-screening loan summary. · Site visit to be conducted on a case by case basis to ascertain product, service, project and state of collateral offered where applicable · Photographs to be obtained of these activities/assets as applicable to support loan application. |
| Approval: | The Bank has sole discretion in determining approval of loan applications |
| Disbursal: | Proceeds of loans will be disbursed by Manager’s Cheques payable to the supplier or other recipient except in instances where disbursement requires otherwise. |
| Project Cycle | · The Project will commence on the Start Date. · The Project has a lifespan that remains in effect unless otherwise determined by both parties. · In the first twelve (12) months, the parties will make best efforts to disburse the maximum of the FRF fund. · Successful borrowers are permitted to re-borrow. |
[1] Source: Demerara Bank Limited
[2] Source: Demerara Bank Limited
[3] Source: Demerara Bank Limited