Many black businesses will be able to take their businesses to the next level with a new initiative from the Federal Government. Canada is opening doors to a loan program that will provide financing to Black- owned businesses that often face a steep hill to access capital.
The Black Entrepreneurship Loan Fund, a part of the Black Entrepreneurship Program (BEP), is a partnership between the Government of Canada, Black-led organizations and financial institutions. The loan fund is not a pandemic emergency relief support program, it is a long term incentive for black led organizations who continue to face systemic barriers in starting and growing their business. This has been exacerbated by the COVID-19 pandemic.
The Black Entrepreneurship Loan Fund will provide loans of up to $250,000 for businesses that are majority Black-owned, or entrepreneurs for their startups or existing for-profit small businesses. Social enterprises, partnerships and co-operative businesses are also eligible for the financing. The government says applicants must have a business number, a business plan and financial statements, or project plans in the case of startups.
According to Canada, ” the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade, and Greg Fergus, Parliamentary Secretary to the Prime Minister, to the President of the Treasury Board and to the Minister of Digital Government and Chair of the Parliamentary Black Caucus, announced that the Black Entrepreneurship Loan Fund is now accepting loan applications.
They were joined in the first ever announcement by Rachel Bendayan, Parliamentary Secretary to the Minister of Small Business, Export Promotion and International Trade and Member of Parliament for Outremont; Marci Ien, M)ember of Parliament for Toronto Centre; Emmanuel Dubourg, Member of Parliament for Bourassa; Tiffany Callender, CEO of the Federation of African Canadian Economics (FACE); Michael Denham, President and CEO of the Business Development Bank of Canada (BDC); Christine Bergeron, President and CEO of Vancity; and Robert Paterson, President and CEO of Alterna Savings. Also present at the announcement were leaders from Black-led business organizations from across Canada and senior executives from committed financial institutions.
Quick facts
- The Black Entrepreneurship Program includes:
- up to $53 million for the National Ecosystem Fund to support Black-led business organizations across the country. It will help Black business owners and entrepreneurs access funding and capital and provide them with mentorship, financial planning services and business training. Budget 2021 has proposed investing an additional $51.7 million in this fund.
- up to $291.3 million in support through the Black Entrepreneurship Loan Fund, which will provide loans of up to $250,000 for Black business owners and entrepreneurs. The Government of Canada is investing $33.3 million, and BDC will be the first partner financial institution with an investment of $130 million. An additional $128 million in support has been jointly committed by financial institutions, including the Royal Bank of Canada, BMO Financial Group, Scotiabank, CIBC, the National Bank of Canada, TD Bank, Vancity and Alterna Savings.
- up to $6.5 million for the Black Entrepreneurship Knowledge Hub, which will conduct qualitative and quantitative research and collect data on the state of Black entrepreneurship in Canada and help identify Black entrepreneurs’ barriers to success as well as opportunities for growth. The hub will be run by partnership between Black-led community and business organizations and post-secondary educational institutions.
- The amounts above include costs associated with operating the funds.
- The concepts that were submitted for both the National Ecosystem Fund and the Black Entrepreneurship Knowledge Hub are currently under review.
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FACE founders collectively have more than 35 years of experience serving Black Canadian business communities and will deliver the loan fund alongside participating financial institutions to ensure that it meets the needs of Black Canadian business owners and entrepreneurs from coast to coast to coast. FACE is a coalition that consists of several prominent Black business and community organizations which includes the Africa Centre, Black Business Initiative, Groupe 37.37 and other organizations.
The Final Word
- LCCMedia thinks loans are a great incentive for business but we should remember that they are loans and they will be paid back. Black communities have been marginalized for a long time. Are these loans not a way to keep black businesses in a generational cycle of poverty, or perhaps not? We should perhaps embrace this historic announcement with caution and excitement. If you are getting in debt by getting a loan, have a plan also to pay up the loan.
