The Black Entrepreneurship Loan Fund is now open to applicants, and will provide loans up to $250,000 to Black business owners and entrepreneurs across the country.
On Monday, the federal government said Black business owners and entrepreneurs face systemic barriers in starting and growing their businesses, and the problem has been exacerbated by the pandemic.
A partnership between the federal government, business organizations and financial institutions, the fund is accepting applications from business owners and entrepreneurs through the support organization Federation of African Canadian Economics, or FACE.
To be eligible, applicants must self-identify as Black or be part of a company that is Black-led, defined as a majority ownership of more than 51 percent.
"This is a meaningful historic step to correct a historic wrong: the systemic barriers in accessing financing faced by people of African descent,” MP Greg Fergus, whose roles include Parliamentary Secretary to the Prime Minister and Chair of the Parliamentary Black Caucus, said in a statement.
“We need to build a more inclusive economy...This loan fund partnership unlocks our extraordinary potential and creates economic prosperity for all Canadians."
Businesses eligible for the loans include startups and for-profit small businesses, including corporations or sole proprietors and for-profit social enterprises. Businesses must have a business plan, business registration and recent financial statements or financial projections.
Loans can be used for capital investments, working capital inventory, payroll, lease payments, accounts management, rent, overhead costs and short-term receivable financing, such as financing to service a contact.
A component of the Black Entrepreneurship Program, or BEP, the fund is worth $291.3 million. The first phase includes a $33.3 million contribution from the Government of Canada and $130 million from the Business Development Bank of Canada, or BDC. BDC, along with Vancity and Alterna Savings, are the first partner financial institutions in the fund.
The second phase will include an contribution of $128 million from the Royal Bank of Canada, BMO Financial Group, Scotiabank, CIBC, the National Bank of Canada and TD Bank.
Loans will be processed by FACE and BDC.