Entrepreneurs now have a place to get an injection of venture capital under a joint programme set up by The Bank of N.T. Butterfield and Son Ltd. and the Bermuda Small Business Development Corp.

Under the programme the Bank of Butterfield will provide up to $500,000 in funding to a business. At least 10 percent of the funding will be in the form of a loan guaranteed by the Bermuda Small Business Development Corp.

The rest of the money will be an equity stake in the business. The bank intends to recover its investment when the business can repay the capital, or when new shareholders buy out the bank's ownership interest.

The capital is available for entrepreneurs who want to start up a business, or want to expand an existing business. Bank president and chief executive officer Calum Johnston said he expected there would be enough demand for about $5 million in funding.

"The programme will be very flexible and the only inflexible rule is that the business seeking the capital must be Bermudian owned and managed,'' he said yesterday at a press conference.

Entrepreneurs will be required to submit applications under the programme to the Bermuda Small Business Development Corp. The bank will administer the programme through its business banking unit created earlier this year.

Michelle Khaldun, who heads up the unit, said there was a need for such venture capital.

"A lot of small and medium sized businesses are under capitalised,'' she said. "This programme will provide that capitalisation to expand, restructure or startup.'' The unit currently caters to about 80 percent of the small and medium sized businesses on the Island with an annual turnover of $1 million or less she estimated. It has about 800 customers.

CAPITAL IDEA -- Bank of Butterfield CEO Calum Johnston