George Town, Grand Cayman:  The Minister for Finance and Economic Development, Hon. Roy McTaggart is pleased to inform the public that the Government of the Cayman Islands and five (5) local financial institutions (“the Banks”) have agreed in principle to a government guaranteed loan scheme to assist medium and large-sized businesses with meeting their operating and capital expenditure and re-financing debt needs. 

Under the loan scheme, the Banks have agreed to consider applications for loans from eligible medium and large-sized businesses up to a maximum of CI$200 million – where each medium and large-sized business can borrow up to CI$750,000 and CI$3,000,000, respectively. The Government will guarantee 50%, or a total not to exceed CI$100 million, of the loans.

The Banks that are working with the Government to provide the scheme that is still subject to formal credit approval are: 

• Butterfield Bank (Cayman) Limited;
• Cayman National Bank Ltd;
• FirstCaribbean International Bank (Cayman) Limited;
• RBC Royal Bank (Cayman) Limited; and
• ScotiaBank & Trust (Cayman) Limited.

To be eligible to apply for a loan under the scheme, businesses must:

• be at least 60% Caymanian owned;
• be a Cayman-registered company, Caymanian Sole Proprietorship, or Partnership on 22 March 2020;
• have 13 or more employees as at 22 March 2020 and;
• be in good credit standing with their bank; and 
• satisfy all credit approval and other requirements of the participating financial institutions.

A medium-sized business is defined as a business employing from 13 to 50 employees or it has gross revenue of CI$750,001 to CI$5,000,000 and a large-sized business is defined as a business employing over 50 employees or it has gross revenue of over CI$5,000,000.

The interest rate will be variable at the prevailing CI Dollar or US Dollar Prime Rate plus up to 1.50%. The current CI Dollar and US Dollar Prime rate is 3.25%.

The banks will charge the usual application, commitment and legal fees and may require businesses to obtain insurance in a sum at least equal to the loan amount, among any other internal requirements and may also require other security from borrowers, in addition to the government guarantee.

There will be a 12-month repayment moratorium period where businesses will only pay interest during the first 12 months. The interest for the first 12 months will be deducted from the approved loan amount and placed in an escrow account.

The maximum repayment period, including the 12-month moratorium period, is 7 years and businesses will have up to one (1) year to apply for the loan. It is anticipated that the loan scheme will be available for businesses to apply on 1 November 2020.

The Government will also be waiving the 1 – 1 ½% stamp duty that may be applicable to any charges placed over assets to provide security for the loans. Other stamp duties and normal charges may be applicable.

As the government guarantee will require the approval of the Legislative Assembly, the Government intends to present a motion during the upcoming Meeting of the Legislative