| 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 upsLoggingSawmillingAcquisition of Machinery and EquipmentValue added activitiesExpansion (Capital Works)Working Capital |
| Target Groups | IndividualsRegistered BusinessesRegistered 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:Employ not more than Ten (10) persons;Gross annual revenues of not more than G$30,000,000Total 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:Employ above 10 Persons Gross annual revenues exceeding G$30,000,000Total 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 waivedPrepayment – fees waivedCredit Info Check -$2,000Site 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.Lawyer’s Fees – 1% of the loan amountFiling 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 OperatorsSmall Concession Holders/ProducersCommunity Logging Operators Up to $30M Mid -Size and Large Businesses/Companies Mid and Large Size Concession Holders/ProducersMid and Large Size Concession HoldersMid and Large Size SawmillersMid and Large Size Producers and SawmillersMid 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 MortgagesDebentures Supplementary Collateral as may be requested Bills of SaleAssignments of Salaries/Contract Proceeds /SharesAssignment of Fire/Life/Stock InsuranceGuaranteesPromissory Notes *Exceptions to be allowed by Bank’s Management |
| Eligibility Criteria | Must be engaged in a forestry sector related activityMust 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 GuyanesePre-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: | All Branches of Demerara Bank Limited |
| Marketing: | Promotion of Launching of FRF Loan Program when first ten (10) loans approvedTo 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 applicantTIN Certificate for each applicantRecent Proof of Address for each applicantFinancial Statements (Previous three years)Cash Flow Projection for the next twelve monthsApplication 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 collateralValuation of PropertyRelevant Licenses/PermitsDetailed 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 registrantRecent Proof of Address for each registrantBusiness Registration/ Registration under the Friendly Societies Act/ Cooperative Societies ActTrust Deed/Rules of Association/Constitution for Association/CooperativeFinancial Statements (Previous three years)Cash Flow Projection for the next twelve monthsBusiness 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 collateralValuation of PropertyRelevant Licenses/Concession AgreementDetailed 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 DirectorsRecent Proof of Address for each Director and the CompanyTIN Certificate of Company and for each DirectorCertificate of IncorporationMemorandum of Association or Articles of AssociationCertificate of Good StandingAnnual Return (Previous two years)(Audited) Financial Statements (Previous three years)Cash Flow Projection for the next twelve monthsBusiness 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 collateralValuation of PropertyRelevant Licenses/ Concession AgreementsDetailed 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 applicablePhotographs 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
For more information contact
Office of the Forestry Revolving Fund
Forestry Training Centre Building
Lot 1 Water Street, Kingston.
Email: forestryrf@gmail.com
Tel No: 592 223-5061or 592 225-3866