Loan FAQ

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For Which Purposes Does the Bank Lend?

The Bank provides funding for assets required to establish or expand a business operating in one of six industry classifications: agriculture, fishing, manufacturing, tourism, transportation and auxiliary services.  More specifically, the Bank may lend for the acquisition of land and building, equipment, light vehicles, office furniture, raw materials inventory, and permanent working capital requirements.

Generally, the Bank will not directly finance retail  inventory, loan consolidations, seasonal working capital deficiencies, purchase of shares, aircrafts, or properties primarily intended for rental that are not touristic.  Also, the Bank is not engaged in any form of consumer lending.  At this time, the Bank is strictly restricted to lending for business purposes only.


What are the Bank’s Eligibility Requirements?

The Bank lending is restricted to citizens of the Bahamas between who have attained the age of 18 years old. 

For joint ventures, partnerships and limited companies, the Bank may only finance projects that are at least 60% beneficially owned and controlled by citizens of the Bahamas and operate under the laws of the Bahamas. 

There is one additional criterion that applies to limited companies.  They must be incorporated under the laws of the Bahamas.


What are Bank Equity and Collateral Criteria?

It is required that applicants contribute a minimum of 15% of the total project cost and that the loan amount be 100% collateralized.  These minimal requirement may be increased by management based on its assessment of the project risks, probability of success, and financial structure.


What Assets Will the Bank Accept as Security?

As a general rule, the Bank will accept real estate, equipment, (including boats, construction equipment, plant machinery), office and project related furniture, and motor vehicles.  In some cases the Bank may accept shares of stock registered on BISX.  Click here for more details on what the Bank will accept as security.

What If I Do Not Have Adequate Collateral

The Government has in place a loan guarantee scheme that is designed to assist those citizens who DO NOT HAVE adequate assets to secure a loan.  The Bank may apply under this facility for a guarantee on an applicant’s behalf if it considers the project feasible and the applicant credit worthy.  For more information Click Here

How Do I Apply?

The first step is to schedule an appointment with one of our officers.  This can be done by clicking on the designated link Click Here for an appointment or you may contact the Bank directly - at 702-5700.
Documentation Required

Standard documentation required on all loans include:

Additional documentation will be required based on the purpose of the loan, the nature of the security, the form of ownership and source of project revenues.


How Long Does It Take To Process an Application?

Within the usual course of business, we anticipate that the Bank will respond to application requests within 60 days of all required documentation being delivered to the Bank. 

Unlike consumer lending, financing a project may require the Bank to obtain information from other institutions, Government agencies and consultants to properly assess the viability of an application.  Sometimes, such research can be time consuming.  The Bank expects that in most cases it will be in a position to provide an answer within a shorter period of time.


Is There an Administration Fee?

Yes.  An administration fee of up to 1½% (with a $150.00 minimum) must be paid on acceptance of a loan offer.  This charge forms part of what is defined as closing costs.


Are There Any Other Costs and Charges?

Yes.  Legal costs and disbursements, transaction taxes, and first year insurance premiums (where required) form apart of closing costs and are payable prior to disbursement of a loan. 

Because the type of collateral impacts the closing costs, each project's closing costs may differ. An estimation of the total closing costs will be provided during the course of the application and verication process.

Can Closing Costs be included in the Loan?

Yes.  Where the assets securing the loan are sufficient to cover the amount being borrowed and such costs. 


What Kind of Insurance Do I Need For a Loan?

The borrower is normally asked to aquire life insurance for an amount equal to face value the loan.  BDB does NOT provide a comprehensive credit program.  

The borrower is asked to provide comprehensive insurance on all assets being used to secure the loan and those assets deemed critical to the business operation (whether they are being held as security or not)

In all cases, BDB must be noted as loss payee or beneficiary (as appropriate) on such polices.


What is the Bank’s Interest Rate?

The interest rate charged on a loan is determined by several factors and do change periodically.  Please call our Credit Department for current rates.

Is The Interest Rate Fixed or Variable?

In all instances, the Bank reserves the right to increase or decrease the interest rate on a loan. 

Are There Any Penalties for Early Repayment?

No.  There are no prepayment or early repayment penalties.