Black Canadian business owners and entrepreneurs can now apply to a new loan program.
The Black Entrepreneurship Loan Fund provides loans up to $250,000 to Black business owners and entrepreneurs across Canada. The program opened for application on May 31, 2021.
The Black Entrepreneurship Loan Fund is a partnership between the Government of Canada, Black-led business organizations, and several financial institutions. It is a component of the Black Entrepreneurship Program (BEP).
The program is accepting applications through the Federation of African Canadian Economics (FACE).
What is the microloan pilot program?
Alterna Savings and Vancity credit unions have collaborated with FACE to offer a microloan pilot program under the Black Entrepreneurship Loan Fund. They will deliver microloans from $10,000 to $25,000 to Black entrepreneurs in Ontario and British Columbia.
Depending on the success of this pilot, the federal government and FACE may invite other financial institutions to deliver microloans across Canada.
What is the eligibility criteria for the Black Entrepreneurship Loan Fund?
Eligible applicants must:
- Self-identify as Black or Black-led (majority ownership of >51% by Black Canadians)
- Be a legal resident of Canada: Canadian citizen or permanent resident, or conventional refugee (for microloans only), or a legal entity owned and controlled by a Canadian citizen or citizens.
- Be at least 18 of age.
- Eligible businesses include:
- Canadian start-ups and existing for-profit small businesses. They can be corporations or sole proprietors and for-profit social enterprises.
- Eligible businesses must have a business plan, business registration and recent financial statements or financial projections if they are start-ups.
Please note that not-for-profit organizations are not eligible for loans.
How may I use the loan granted?
Loans under the Fund can be used for:
- Capital investments: Equipment, leasehold improvements, property improvement, office equipment
- Working capital: Inventory, payroll, lease payments, accounts management, rent, overhead costs
- Short-term receivable financing (i.e., financing to service a contact)
What is the maximum loan amount I may receive?
The Black Entrepreneurship Loan Fund offers loans up to $250,000. FACE can provide loans of up to $100,000. Loans above this figure will be risk shared with the Business Development Bank of Canada.
Under the microloan pilot program, Alterna Savings and Vancity provide loans between $10,000 and $25,000.
How do I apply for the Black Entrepreneurship Loan Fund?
You can apply to the program through the FACE website.
How will the loan applications be processed?
FACE and the Business Development Bank of Canada share the task of processing applications. FACE is the first point of entry for all Black-owned enterprises applying for a loan.
The loan applications are reviewed by FACE, and the underwriting (fulfillment) process is shared by the Business Development Bank of Canada.
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