Security & Surety Information

Summary of Surety Requirements

Please note: Loans may be secured by the following collateral security. Land or property can only be held if there are no existing mortgages or loans against them.

List of Approved Security Accepted by the SRLF

Guidelines for Using Land/House as Collateral

When land/house & land is used as collateral, the loan is secured by way of legal mortgage. The owner(s) of the proposed property will have to engage the services of an independent Attorney-at-Law and notify the SRLF of that Attorney’s contact information. The SRLF’s Legal Officer will communicate with the selected Attorney-at-Law, to request all things necessary to facilitate the transaction.

It is of critical importance to note that the mortgage process may NOT be completed in time for commencement of the Student’s period of study. If the land/house & land is being used to secure the entire loan, NO FUNDS WILL BE DISBURSED UNTIL THE MORTGAGE PROCESS IS COMPLETE!!!

It is therefore highly recommended that parties put alternative measures in place to cover at least the first semester. For example:  independent finances outside of the loan, or some form of ADDITIONAL approved security to cover half of the first disbursement of the approved SRLF loan. Such forms of additional security include cash, an insurance policy/ies, government savings bonds, treasury notes/debentures. In the case of alternative security, they will be released upon perfection of the mortgage.

If the proposed land/house & land does NOT meet the legal requirements, or if parties refuse to, or are not willing to provide what is requested, the mortgage will NOT be perfected.  If additional security was put in place for an initial disbursement, that security will not be released until the sum disbursed is repaid (together with interest and insurance). The Student will then have to advise on how they will cover the cost of the remainder of the programme or secure the balance of the loan, before the SRLF can proceed with any further disbursements.

Some other critical documents which will be required:

• If the property was used as security for a prior loan, satisfactory evidence of release must be provided.
• A current Land Tax Bill, Receipt & Certificate must be provided, together with a Certificate issued by BRA for each Mortgagor confirming that they do not owe VAT, Excise Tax or Income Tax.
• If any of the Mortgagors is/was an employer, a Clearance Certificate must be provided evidencing that there are no outstanding sums due to NIS.

Please note that once the loan is over $50,000 some form of security must be used. Security can also be used to cover loans under $50,000. Two sureties plus security can be used to cover loans in excess of $50,000.

Kindly be aware that if you intend to use the property as security, the following documents must be provided upfront:

• A pledge letter from the owner(s) of the property - must Include the location of the property being pledged and details about any structures on the property (eg single-storey house with three bedrooms and three bathrooms.)
• If the property is owned by a Company, the pledge letter must be signed by the number of authorized signatories based on the Bye-Laws of the Company. A Resolution evidencing agreement by the directors to pledge the property is also required.
• Certificate of Title – This is required if the lot is registered or has been declared a registered lot. An enquiry can be made at the Land Registry to ascertain the necessary information and complete the registration process if necessary)
• Lot plan (ie plan of the land prepared by a Certified Land Surveyor)
• Most recent land tax bill
• Land tax receipt
• The name, address, and contact information of the Attorney-at-Law representing you in this matter
• Photographs of the property may be requested in the initial stages

Surety Requirements

• The proposed surety cannot have an existing loan with the SRLF.
• The proposed surety must be at least twenty-one (21) years of age and no older than fifty-four (54) years of age at the time of signing the contract.
• Where only one surety is applicable, i.e. loans for $30,000 or less the following shall apply:
  • For loans less than $20,000 the annual income requirement for a surety shall be no less than $20k
  • For Loans of $20,000 up to $30,000 the annual income shall be no less than $30k.
• In instances where two (2) sureties are applicable, i.e. loans greater than $30,000 up to a maximum of $50,000 the following shall apply:
  • The combined income of the two sureties shall be no less than $60k. Please note that the annual income of any one of the sureties must be no less than $20k.
• The surety or sureties must have been gainfully employed continuous basis for a minimum period of a year or on a cumulative basis for at least two years.
• Sureties must be citizens of Barbados, residing and employed in the island.
• Have a credit rating that meets the SRLF credit rating guidelines.
• Evidence of income must be provided:
  • For Employed persons - Pay slip and a Job letter.
  • For Self-Employed Persons - Financial Statements and an Affidavit confirming Income & Expenditure of the business from an Attorney-at-law, Justice of Peace, Minister of Religion, or your Personal Accountant.
• Provide to the SRLF on the prescribed form, a statement of income and expenses along with a statement of net worth.
• Both parents living in the same household shall not be permitted to act as surety for the said loan.
• Spouses of borrowers are not allowed to act as sureties.
• Two valid Government Approved IDs bearing a photo of the Surety and national registration number eg updated driver’s license (NB an expired card and accompanying receipt is NOT valid ID), Barbados ID card, passport. A photo of all Sureties will be taken at the time of signing of the contract.

Before an existing surety can be replaced, the loan must be current and all new contracts executed before the existing surety is released.