Financing for young people opening their first business

It is an Economic Development Bank financing programme for people 29 or younger setting up a business for the first time. Beyond the loan, the law orders the Bank to make financing requirements flexible, offer entrepreneurial training, and give the young person priority in the permits they need to open.

Anyone who is twenty-nine (29) or younger at the time of filing a formal application to the Program at the Economic Development Bank for Puerto Rico, and who is running a business for the first time. The law takes the term "young person" from Act 167-2003, the Youth Bill of Rights of Puerto Rico. Note the two conditions: age is measured at filing, not at approval, and it must be your first business.

• Being twenty-nine (29) or younger at the time of filing the formal application at the Economic Development Bank.Verified against the official source
• Running a business for the first time. The law's definition requires both: the age and that it be your first business.Verified against the official source
• Contributing your own capital: the regulations must set a minimum of between 0% and 10% of the project's total cost, according to your financial condition and entrepreneurial capacity. The young person's capital may be staggered.Verified against the official source

• The law publishes no document list or form. It speaks of filing a formal application to the Program at the Economic Development Bank, and leaves the rest to the regulations. The enrolled text also prints several Article 4 subsections abbreviated, so the requirement list you see here is not complete.

1. 1

   Step 1: Check you meet both conditions

   The law defines "young person" for this programme as anyone twenty-nine or younger at the time of filing a formal application to the Program at the Economic Development Bank, and who is running a business for the first time. If you have had a business before, the definition does not cover you; and if you turn 30 before filing, it does not either.

2. 2

   Step 2: Work out how much you would have to put in

   Article 4(a), as this law left it, says the applicant, according to their financial condition and entrepreneurial capacity, must contribute a minimum of between zero percent (0%) and ten percent (10%) of the project's total cost, and that the young person's capital may be staggered. In practice that means the percentage is not fixed: it depends on your situation, and its floor can be zero.

3. 3

   Step 3: Expect lighter collateral requirements

   Article 3(c) orders the Bank's President to make financing requirements for young people flexible and/or looser, with no need to set loan quotas, and with lower collateral requirements on the loans. It is a legislative instruction to the Bank, not a guarantee of approval.

4. 4

   Step 4: Ask for the entrepreneurial training

   Article 3(b) directs coordination, together with the Youth Development and Labor Development programmes of the Department of Economic Development and Commerce, of an Entrepreneurial Training Program including courses in Market Studies, Feasibility Studies, Business Plans, Marketing Plans and Financing Proposals. Those are exactly the pieces usually missing from a first loan application.

5. 5

   Step 5: Use the priority on permits and licences

   This is the new part that saves the most time. Article 4(f) orders an expedited process to be created so participating young entrepreneurs are given priority in granting the permits, licences and government certifications required to begin operations. To that end, the Bank shall develop a referral system to the agencies called upon to grant government benefits, issue certifications, permits and others.

At the Economic Development Bank for Puerto Rico, where the Program sits and where the formal application is filed. The training is coordinated with the Youth Development and Labor Development programmes of the Department of Economic Development and Commerce.

• Counting your age at loan approval: the law measures it at the time of filing the formal application.
• Forgetting the second condition: you must be running a business for the first time.
• Believing you must put in 10%: the legal range is a minimum of between 0% and 10%, depending on your financial condition and entrepreneurial capacity.
• Not asking about staggering: the law allows the young person's capital to be set on a staggered basis.
• Leaving the permit priority unused: Article 4(f) orders an expedited process and a referral system to the agencies that grant permits and certifications.

These are the government pages this guide is based on.

• Departamento de Desarrollo Económico y Comercio (DDEC)

  DDEC

  bvirtualogp.pr.gov