The Black Entrepreneurship Loan Fund, as part of the Black Entrepreneurship Program (BEP), is now open for applications. With an investment of $291.3 million – $33 million from the Government of Canada, $130 million from BDC, and a $128 million joint commitment from RBC, BMO, Scotiabank, CIBC, National Bank, TD Bank, and credit unions Vancity and Alterna Savings – the program aims to reduce barriers Black Canadians face in accessing funding, and support the success of Black entrepreneurs and business owners.
“When Black Canadians are able to create prosperity by successfully launching businesses, everyone wins.”
– Greg Fergus, Member of parliament and chair of the Canadian Caucus of Black Parliamentarians
Funding Snapshot: Black Entrepreneurship Loan Fund
Amount of Funding
- Up to $250,000 for eligible applicants – It is worth noting that FACE can only provide loans of up to $100,000. Loans above this amount will be risk shared with the Business Development Bank of Canada.
- Through the microloan pilot program, Alterna Savings and Vancity will offer loans between $10,000 and $25,000.
To be eligible for the Black Entrepreneurship Loan Fund, an applicant must:
- Self-identify as Black or Black-led (majority ownership of >51% by Black Canadians);
- Be a majority-owned business by a Black Canadian – businesses may include start-ups, existing for-profit small businesses, corporations or sole proprietors, and for-profit social enterprises;
- Have a business plan, business registration and recent financial statements or financial projections for start-ups;
- Be a legal resident of Canada: i.e. Canadian citizen or permanent resident, or conventional refugee (for microloans only), or a legal entity owned and controlled by a Canadian citizen or citizens; and
- Be a minimum of 18 years of age.
Not-for-profit organizations are not eligible for loans.
Applicants may apply for loans to 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).
Loans may not be used to finance items such as:
- Goodwill, restructuring conventional business-related debts, dividend payout, shareholder loan repayment or issuance, bonuses, stock buybacks, option issuance, or an increase to shareholder or management committee compensation.
- The Black Entrepreneurship Loan Fund is accepting applications as of May 31, 2021.
- Time for turnaround will depend on the type of applications received and the actions required by FACE and the Business Development Bank of Canada. As a result, the timelines will vary based on individual circumstances.
Mentor Works is a business support organization specializing in Canadian government funding. The Ontario-based business has helped hundreds of businesses build and execute their funding strategy through a mix of federal and provincial government grants, loans, and tax credits. Mentor Works offers free online resources, funding webinars, and news via their website at www.mentorworks.ca.
Author: Alena Barreca – As a Marketing Coordinator at Mentor Works, Alena helps Canadian business owners by creating educational content about government funding.