As Jamaica’s micro, small and medium-sized enterprises (MSMEs) grapple with rising operational costs and tighter cash flow, the Jamaica Business Development Corporation (JBDC) is urging entrepreneurs to take a closer look at the early signs of financial distress before their businesses reach the brink of collapse.
That warning came during the Virtual Biz Zone Webinar hosted by the JBDC on Tuesday, October 14, 2025, under the theme “Debt Alarm: Identifying the Signs of Financial Distress.” The session, held in partnership with the Office of the Government Trustee (OGT), equipped business owners with practical tools to identify and address financial red flags before they spiral into bankruptcy.
Speaking at the event, Elece Campbell, Government Trustee at the OGT, drew an analogy likening financial management to car maintenance.
“Think of a business’ financial health like a car,” Campbell said. “The financial distress isn’t when the business stops in the middle of the road one day when you are driving to work – it’s really the warning signs that you see on the dashboard. The dashboard where it says you may need an oil change or tyre pressure is low.”
She continued, “You don’t want to see that the tyre pressure is low and you’re still driving. That’s what many of us are doing with our finances – ignoring the warning lights until the car breaks down.”
Her warnings echo global findings from the International Finance Corporation’s (IFC’s), study An updated Estimation and Evolution of the Micro, Small and Medium Enterprises (MSME) Gap in Emerging and Developing markets, which has repeatedly cited access to finance as one of the most critical barriers to MSME survival.
In the same breath, the JBDC has been advocating for access to appropriate financial solutions for the sector. As the local body supporting MSME development, the agency has made financial literacy and resilience a core part of its mandate to strengthen Jamaica’s MSME sector.
Acting Chief Executive Officer at the JBDC Harold Davis says the agency has formed strategic partnerships with financial institutions as it aims to bridge the gap between financier and entrepreneur. “We have found that at times they don’t quite understand each other; the needs of MSMEs and the requirements to access finance. So, the JBDC acts as a bridge which connects the two,” he said.
The JBDC now turns its attention to another side of financing by highlighting debt management through a partnership with the Office of the Government Trustee.
“Our goal is to not only ensure that our MSMEs access the appropriate financing solutions, but also that they are prepared to sustain their businesses through this process. In our financial literacy initiatives, we expose our clients to various forms of financing. Realistically, we know that within a Jamaica context, a most common form might be a loan, and so debt management becomes significant,” Davis explained.
RED FLAGS
Campbell outlined several financial red flags that often precede bankruptcy, noting that distress typically builds over time through small, repeated mistakes.
Among the most common warning signs are missed bill or loan payments, borrowing to cover everyday expenses, and only paying the minimum amount on credit cards or loans.
“Every month you’re missing your bill payments… every month the creditors calling you… you are only able to make minimum payments on your loan… it is going downhill and you need help,” Campbell cautioned.
The IFC’s 2024 MSME Financing Gap report noted that many small businesses operate with thin profit margins and limited cash buffers, leaving them vulnerable to even small disruptions in revenue. This fragility, the report found, is particularly pronounced in developing economies such as Jamaica, where informal operations and limited collateral make it harder for firms to access credit on reasonable terms.
Locally, JBDC research has also shown that MSMEs often underestimate their exposure to risk until cash flow tightens or credit dries up. The agency has been actively promoting financial literacy through initiatives like the Biz Zone series to help business owners build stronger foundations.
She added that even something as simple as using credit to buy food or pay utilities indicates that a business has entered dangerous territory.
“Using credit cards for essentials like food and utilities… something as simple as food that you cannot pull out $1,000 and pay for it,” she said. “That is a red flag.”
Campbell also listed increasing total debt balances month over month, frequent calls or letters from creditors, borrowing from friends or family to stay afloat, and avoiding conversations about finances as other warning signs.
PREVENTION BETTER THAN CURE
According to Campbell, the biggest mistake entrepreneurs make is waiting too long to act. “There is a high cost of delay,” she warned. “You are there ignoring the warning signs, the debt warning signs, and you do nothing about it.”
The consequences, she explained, go beyond financial loss. Chronic debt distress can lead to damaged credit scores, legal action from creditors, and even mental health strain for business owners.
“Prevention better than cure,” she said. “When you notice you’re only making minimum payments or creditors keep calling you, it’s going downhill and you need help. If you didn’t budget for it this month and you don’t need it, then don’t buy it. Click off the Amazon tab. It’s not every time you see a sale going on Amazon Prime Day, you can buy.”
Campbell reminded entrepreneurs that the OGT offers legal and advisory support for those already facing financial distress under the Insolvency Act.
As an agency of the Ministry of Industry, Investment & Commerce (MIIC), the OGT is mandated to assist debtors, assess their financial position and prepare and file applications with the Supervisor of Insolvency for the implementation of proposals or the administration in bankruptcy on debtors’ behalf.
Once appointed to act with respect to their estates, the Trustee conducts further investigations into the debtors’ affairs; receives, verifies and admits claims by their creditors; identifies, recovers and manages or disposes of their assets; collects payments and invests estates funds; and, as soon as reasonably practicable, prepares and processes dividend payments to creditors in full or partial satisfaction of their debts.
In furtherance of that mandate, the OGT also seeks to educate the public on the legal mechanisms available under the Insolvency Act for dealing with financial difficulties, increase awareness of the office’s role in assisting debtors, and promote utilisation of the office’s cost-efficient service.
“We want to promote early intervention,” Campbell said. “We are trying to help you prevent your debt from worsening, but there are times when it cannot be helped and that is why we have the Office of the Government Trustee.”
Through initiatives like the Virtual Biz Zone, the JBDC continues to link MSMEs with agencies that support the success of their businesses. The Debt Management Series of the Biz Zone continues on Tuesday October 28, 2025 with Brithney Savage, Director of Insolvency Administration speaking on ‘Debt Therapy – Business Rehabilitation Under the Insolvency Act’. Interested persons can register atwww.jbdc.net. JBDC is driving businesses ‘From Concept to Market’.
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