The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A Bahamian-made ice cream producer is accusing the Small Business Development Centre (SBDC) and Royal Bank of Canada (RBC) of trying to “choke” it out of business amid COVID-related distress.

Melissa Darville, co-owner of Shiver, told Tribune Business that the SBDC had failed to support her during what she described as undue financial and operational difficulties caused by the pandemic’s economic stress.

And she added that operations had paused due to cash flow difficulties, which she blamed on RBC’s non-cooperation and the bank levying late fees for non-repayment and taking whatever money Shiver was making from its account to cover loan arrears. 

Ms Darville said: “What the SBDC is doing to me is beyond inhumane. It’s just beyond. If I were a lazy person then I would say this is why the business is failing, but it’s because of the obstacles put there apart from COVID-19.

“Apart from me figuring out how to make money during COVID-19, they are still putting obstacles in front of me. It was basically like they were trying to choke me to death.” 

The SBDC, in response to questions posed by Tribune Business, said in an e-mailed reply: “In response to media inquiries about Shiver, one of our early success stories, the Access Accelerator Small Business Development Centre (Access Accelerator) wishes to state that our very existence is founded on the notion that Bahamians can get into business and succeed.

“We have spent countless man-hours, and employed the ingenuity of dozens of Bahamian experts, in attempting to assist every client, including Shiver. Our process is clear and has been public from the very beginning of the Access Accelerator in September 2018. One of the most important elements of our process is what we term the ‘three-year handshake’.

“This means that once a client accesses funding, we assign someone for three years to work with the client and the financing partners to ensure that, first, the business remains healthy and that all the necessary obligations are met to ensure business sustainability. Second, the three-year handshake is meant to ensure that financial obligations are both clearly articulated and understood, and ultimately, met,” it added.

The SBDC disputed Ms Darville’s assertion that it had abandoned Shiver or any other client, adding that the COVID-19 pandemic had “put pressure” on all businesses and that their “mandate includes diligent oversight and fiduciary responsibility of the taxpayer dollars that are in our system. To that end, we adhere strictly to best practices and our published methodology”.

RBC did not respond to Tribune Business e-mails and inquiries seeking comment. Ms Darville said Shiver is on a “break” because cash-flow issues that are putting pressure on its operations. “It’s like the SBDC and RBC were trying to do whatever it is they had to do to get the business to fail, and RBC was even putting in $400 late fees that had nothing to do with my loan,” she alleged.

Ms Darville and her initial business partner, Elvis Percentie, obtained a loan from RBC to finance Shiver via the SBDC. With the help of the SBDC, it received $161,600 in funding in 2019. Some $100,000 was via a loan from RBC, with the balance featuring a $50,000 equity investment from the Bahamas Entrepreneurial Venture Fund (BEVF) along with $11,600 in grant funding from the Government.

After Shiver ran into financial difficulties as a result of the COVID-19 pandemic, Ms Darville said she started receiving frequent phone calls from the SBDC. These increased, she added, when the SBDC found out that Mr Percentie was no longer directly involved with Shiver’s day-to-day operations.

“My business partner was 50 percent with me, but he left a year-and-a-half ago and hasn’t helped me with anything. No contribution at all to this business,” Ms Darville said. “So the SBDC reached out to him and was trying to liaise with him to come back and take over the company, and I’m saying he is dead equity now. He has not contributed to this business and he knows nothing about what’s going on here.” 

She added that her SBDC advisor kept asking if she was ready to “let someone take over the day -to-day operations of the business. I was like how could you interrupt my cash flow and then expect them to be operating efficiently even in the face of COVID-19?” 

Ms Darville was referring to money she received from the Dubai Expo 2020, where she invoiced the Expo for $9,999. She alleges a significant amount of this sum was taken by RBC for loan arrears, and her account was frozen, leaving her unable to deposit money she could use.

Asserting that was still on a COVID loan deferral scheme with RBC at the time, Ms Darville admitted to withdrawing $4,000 of the $9,999 but said it was to pay her Bahamas Power & Light (BPL) bill because the power company was ready to disconnect her service. 

She said: “RBC told me I was not allowed to use bank funds to pay my light bill because that’s not a part of the agreement. But this is an ice cream business? How do you expect me to function with no electricity?” 

Ms Darville said RBC took out late payment fees averaging $400 per payment, and also froze subsequent deposits for loan payments. The SBDC, however, in defending RBC, said: “We are in the business of assisting Bahamian micro, small and medium-sized enterprises. Our funding partners in this venture, RBC and the venture fund, are perfectly aligned with that model and have worked with us and our clients to fulfill that mandate.” 

Ms Darville showed Tribune Business an RBC statement print out of four loan deduction payments on February 8, averaging $1,900, and said it is “impossible to keep up with operations with that kind of pressure on me. I had to give Shiver a break until I sort out some means of funding”.

An screenshot of an e-mail exchange between the SBDC’s executive director, Davinia Grant, to RBC representatives questioning the bank on the deductions, and asking them to clarify if whether or not the deductions were as a result of the loan payments, showed the agency was aware of Shiver’s situation. 

Ms Darville said: “The SBDC were entertaining people who wanted to buy my equipment and trying to get me to concede to let them manage my company and I just sit back. I can’t agree to that because it’s my idea and it’s my company, and I’m not going to let someone just come in and take my stuff.

“It’s not that I’m not capable of getting the company back on the ground, it’s just that I don’t have enough funds to do it. So they are essentially telling me that they won’t give me any more money, but would allow for someone else to run the business for me. I said to them no. I told them I would die and turn to dust because I give my company to someone else.

“I have complained to the Inter-American Development Bank about the SBDC because I know they just borrowed some money to run this programme from them. I also complained to the RBC Caribbean headquarters in Barbados.”