The Caribbean Financial Services Corporation (CFSC) provides loans and bonds via its Investments Department. CFSC is involved in financing manufacturing, the agro industry, services, tourism and tourism related activities which enhance the region's foreign exchange earning capabilities and generate employment. 

CFSC provides funding for investment in viable and sustainable projects including capital cost components such as equipment, buildings, real estate and initial working capital. The maximum loan or bond investment that CFSC can make is limited to 15% of its capital. Where the loan or bond requirements exceed CFSC's maximum limit, arrangements can be made to co-finance the transaction with other financial institutions. 

Interest rates are competitive with other financial institutions within the region. The absence of long term credit facilities is considered to be a major problem. Consequently, CFSC allows terms of up to 15 years. Repayment periods, including grace or moratorium periods, can be arranged as circumstances warrant. Borrowers are required to provide up to 40% of the equity. CFSC can also make an equity investment while simultaneously offering debt funding to its clients, based on its assessment of the project.

 

CFSC makes a determination of its investment based on rigorous credit and risk analysis of projects. Requests for financing must be accompanied by a formal Business Proposal. Security is taken on the assets that are financed. Common security instruments include: -

 

  •  Debenture over fixed and floating assets of company
  •  Bill of sale over equipment
  •  Assignment of cash flow stream derived from an asset
  •  Assignment of insurance policies
  •  Promissory notes
  •  Personal guarantees (supported by evidence of net worth sufficient to cover the loan amount)

Bonds usually have a defined term, or maturity, after which the bond is redeemable in shares and or cash. Bonds have additional features that may be attractive to borrowers.