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Business Development Bank of Canada is partnering with up to 80 community organizations to make financing more accessible to underrepresented entrepreneurs across the country, including those with limited credit history, younger individuals and members of racialized communities. To help these smaller organizations get money out the door, BDC will provide financing such as lending or co-lending facilities that match a partner’s investment, as well as guarantees that will help them support riskier small businesses, according to Miguel Barrieras, BDC’s chief community banking and impact officer. The entrepreneurship rate in Canada is declining, with 100,000 fewer entrepreneurs starting businesses compared with 20 years ago, a BDC survey found.
The Crown corporation wants to boost the rate and also ensure that there is equal access to funding for all entrepreneurs, regardless of background, Mr. Barrieras said. Members from underrepresented communities face barriers in accessing capital because of challenges such as systemic racism and discrimination.
Access to financing is the main challenge Black entrepreneurs face in Canada, according to a survey by the African Canadian Senate Group in 2021. Of the 342 entrepreneurs surveyed, 75 per cent said it would be difficult to find $10,000 to support their business. As part of the initiative, BDC will partner with organizations such as Futurpreneur, a non-profit that provides entrepreneurs aged 18 to 39 with loan financing and mentorship.
Futurpreneur has been working with BDC since 2008, and one of its signature initiatives was a COVID-19-era agreement that allowed entrepreneurs who were approved for a loan by Futurpreneur to be automatically eligible for BDC funding. “We really appreciate that BDC is creating a unit that is really focused on the unique needs of equity deserving communities, because it’s not the same as everybody else,” said Karen Greve Young, Futurpreneur’s chief executive officer. Through the new partnership, Futurpreneur will offer co-lending opportunities and mentorship to entrepreneurs, specifically in their first two years of operation.
The organization will also continue to support underserved entrepreneurs from Black and Indigenous communities, as well as LGBTQ, women and newcomer entrepreneurs. Evol, another BDC partner, provides financing to businesses and entrepreneurs from underrepresented communities including women, racialized people, immigrants, First Nations, Inuit, members of the LGBTQ community and people with disabilities. Evol’s clients have to adopt or commit to adopting sustainable development practices based on the 17 UN goals .
Evol has been a partner of BDC since 2021 and will continue providing financing to its target entrepreneurs. For the past three years, Evol has lent about $30-million to its target audience, according to chief executive officer Géraldine Martin. BDC hopes to add more in the coming months to provide additional options for entrepreneurs and increase access to financing.
“We’re going to associate ourselves with groups that focus on a particular population because they have the trust, the understanding and the ability to support them,” Mr. Barrieras said..
