How to Apply

Thank you for your interest in the Pacific Islands Development Bank´s loan program. A Checklist of general requirements for loans and forms may be downloaded from our website (click on Downloads). After compiling all the required information and signing the Loan Application and Authority to Release & Obtain Information forms, mail or hand-deliver the package to our office. Our loan process is very simple:

• Prepare and submit a loan application package and business proposal to PIDB.
• If approved, the bank will send you a commitment or approval letter with terms and conditions.
• If terms and conditions are accepted, the bank prepares the loan documents and closes the loan.
• After loan closing, disbursement of loan proceeds may commence.
• If the loan is disapproved, a letter will be issued stating the reasons for such disapproval.

Frequently Asked Questions

1. Where can I pick up a loan application and other required forms?

From our website, by visiting our office in Guam, or through the Pacific Islands Small Business Development Centers in Kosrae, Palau, Guam, CNMI, Chuuk and Yap. In Pohnpei, applications may be picked up at the Small Business Guaranty and Finance Corporation.

2. What if I am starting a new business?

A comprehensive business plan with Proforma financial statements will be required as part of your loan application.

3. What does a business plan contain?

The key components of a business plan required by the bank may be downloaded from our website under “Downloads”. At minimum, it should contain the following:

• Business Information: Executive Summary, Product & Services, Marketing, Competition, Operating Procedures, Management & Staffing, Pricing, etc.
• Financial Information: Proforma balance sheet, income statement, and cash flow for at least 3 years forward with realistic assumptions and projections; and Sources and Uses of loan proceeds including personal equity.
• Supporting Documents: Copies of GRT filings, Tax returns, personal financial statements, copy of check stub, copy of proposed lease or purchase agreements, copies of letter of intent from suppliers, descriptions and maps of properties offered as collateral, articles of incorporation, bylaws, etc.

4. Who can help me with my business plan?

Internet resources, Pacific Islands Small Business Development Centers in the region, development related government agencies, and private consultants.

5. What if I own an existing business?

Typically the bank will require the last three (3) years´ financial statements or GRT filing and business income tax returns, business license, and other basic information regarding the business.

6 .How long does it take to process my application?

Up to four (4) weeks approval time, if the loan is complete. Processing may take longer if the applicant fails to provide requested information or clarifications in a timely manner.

7. What happens if my loan application is declined?

The bank will notify you in writing stating the reasons the application was declined. You may seek financing from other lending institutions.

8. What happens if my loan application is approved?

The bank will issue a commitment or approval letter with the terms and conditions under which the bank would lend you the money.

9.What does the bank look for in considering your business loan proposal?

The bank will direct its attention and review on the 5 Cs of credit. When applying for a loan and preparing your business plan, you should keep them in mind:

• Character: Your integrity and sincerity. The bank may determine your creditworthiness with a credit bureau report or local credit checks. Your answers to questions in the loan application regarding any past criminal convictions, bankruptcy, and debts you are party to are also used to evaluate your character.
• Capital: This represents your own money or equity you put in the business. It is sometimes called the net worth. The more capital you infuse into the business, the greater the chance your loan will be approved. How much capital you invest in the business is an indication of your commitment.
• Collateral: Assets to secure the loan/debt. The bank will normally take a lien, mortgage, or security interest in whatever assets are being financed. The bank also looks to the personal assets of guarantors or principal owners of the business for additional security. If the amount of borrower´s capital is low, the bank will place a higher emphasis on collateral.
• Capacity: Sufficient cash flow to service the obligation. One of the first things the bank looks for is your ability to repay the loan from the primary source of repayment which is cash flow from operation. We look at your projected income streams and your expenses to determine your net profit to gauge your capacity.
• Conditions: Condition of the overall economy and borrower. Ask yourself, under what conditions does my business operate? From an external standpoint, are the conditions favorable? Who are my competitors, and how does my pricing strategy compares with theirs? What are my competitive advantages? What is my staffing like? Is there a management succession plan in place?