Finance for SMEs

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planeta
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Finance for SMEs

Post by planeta »

TOPIC: Finance for SMEs
1. SME finance needs

MODERATOR: Jeanine Corvetto

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REFERENCE

Ecotourism Emerging Industry Forum (Nov 1-18, 2005)
http://www.planeta.com/ecotravel/tour/emerging.html

planeta
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Seeking examples

Post by planeta »

Discussion is invited in this topic. We are are seeking specific examples of SME finance needs

redbilb

SME Finance Needs

Post by redbilb »

My company is a fairly small company and we have had great successes domestically in developing community-based tourism products.

Part of reason for success is our ability to be flexible, deal with our clients at a personal level that larger companies cannot do. This is a real advantage for us domestically.

However, on the international front, being small seems to be a distinct disadvantage. We have been working on the development of a sustainable tourism product in Guyana for a little over a year now. We have overwhelming support from the community, Ministry of Tourism, and other partners involved.

The difficulty is funding. Our company is too small to qualify for most funding sources. CIDA has a fund in Guyana that has had $5 million dollars annually to spend. In three years not one cent has been spent because every company that has applied has failed to meet the eligibility requirements.

To access the funds, we will be forced to merge with a larger company to meet their requirements. I am resisting doing this because I feel it will significantly reduce our chances of being able to offer the one-to-one personal service that has been our trademark and may ultimately compromise our project. It is a very difficult situation. We have already invested a considerable amount of time, effort and dollars and have demonstrated that even though we are a small company we can accomplish the goals of the project.

BOT agreements are another option for financing but again they are not too practical for a small company.

Anybody else have any thought on the role of small companies in international tourism projects?

Rod Bilz
FRi Ecological Services

Jeanine Corvetto
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Post by Jeanine Corvetto »

Hello All

Welcome to Finance for SMEs! My name is Jeanine Corvetto and I will be your moderator for this topic. I would like to invite all of you to provide your comments regarding your experience in financing your small/medium sized businesses. I would like to thank Rod for starting this discussion with his comments regarding the difficulties he has faced in financing a small start up ecotourism business.

regards
Jeanine Corvetto

Jeanine Corvetto
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Post by Jeanine Corvetto »

Hello Everyone

I wanted to ask you some specific questions regarding your experience in financing your businesses. In the study I co-authored for the IFC with Megan Eplerwood and Pam Wight regarding Ecolodge finance I found that traditional financing through banks was often difficult. Here are some questions:

1. Have you found traditional banks that are willing to lend to your organization?

2. If so what are their terms and conditions? Do they require collateral or other guarantees?

3. What other sources of financing have you used?
- For start up
- Working capital
- Expansion

I look forward to your feedback!

regards

Jeanine Corvetto

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Post by Jeanine Corvetto »

In the IFC study regarding Ecolodge Finance I found that most SME ecotourism business managers had limited previous financial management experience and relied on

Jeanine Corvetto
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Post by Jeanine Corvetto »

Hello Everyone!

Tomorrow is the last day of the forum and I encourage those who have not contributed to please give us your valuable insights regarding your experience with financing your businesses.

jsweeting
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Potential Loan Financing Sources for Ecotourism Businesses

Post by jsweeting »

One of the sponsors of this forum was Verde Ventures who are always on the look out for good opportunities to invest in small tourism companies that support biodiversity conservation. They have made two such loans to-date:

http://www.conservation.org/xp/verdeven ... _lodge.xml

http://www.conservation.org/xp/verdeven ... itions.xml

and have several more in the pipeline. This may not work for every small tourism company but is worth looking into.

Best

Jamie

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