By Priscilla Wiredu
Posted on November 5, 2021
The Black Entrepreneurship Program (BEP) is a funded partnership with the Government of Canada, Black business organizations, and financial institutions. Culminating an investment of up to $350.8 billion in just over four years, it aims to help Black Canadian businesses and Black entrepreneurs progress their businesses and have ongoing future success.
Why it was created
Despite making pivotal contributions to the Canadian economy, Black Canadian entrepreneurs continue to face systemic barriers when it comes to starting a business and business growth. This has been made even more difficult due to the COVID-19 pandemic. The Black Entrepreneurship Program is the first of its kind at tackling these long-standing systemic barriers.
How it works
The Business Development Bank of Canada works with and supports the Federation of African Canadian Economics (FACE) in ensuring the initial set of loan products is delivered in a timely manner to Black business owners and entrepreneurs across Canada. They provide advice and resources, as well as collaborating with FACE on loan approval models that serve the Black Canadian business world.
The Business Development Bank of Canada committed $130 million in capital and acts as a fulfillment agent for the loan fund.
Alterna Savings and Vancity, two banking companies, participate in a microloan pilot program under the load fund, allowing loans ranging from $10,000 to $25,000 to Black entrepreneurs.
How the loans can be used
- Capital investments such as equipment, leasehold improvements, property, and office equipment
- Working capital: Inventory, payroll, lease payments, accounts management, rent
- Short-term receivable financing (e.g. financing to service contacts)
Loans may not be used to finance items like goodwill, restructuring certain business-related debts, dividend payout, shareholder loan repayment or issuance, bonuses, stock buybacks, option issuance, or shareholder or management committee compensation wage increase.
Components of the program are outlined below.
Black Entrepreneurship Loan Fund (BELF)
The BELF is an important step in helping Black business owners and entrepreneurs receive financial support for startups, scale-ups, and growth not just in Canada, but across the globe. It provides up to $250,000 in loans to both Black business owners and entrepreneurs across Canada. The Government of Canada announced the Loan Fund is accepting loan applications from applicants through the Federation of African Canadian Economics (FACE). FACE consists of five prominent Black Business Support Organizations (BBSOs) that have joined forces to create The Black Entrepreneurship Program. The group has a collective of over 35 years’ experience in serving Black Canadian business communities.
Here are the founding members:
- Côte des Neiges Black Community Association
- Groupe 3737
- Black Business Initiative
- Black Business and Professional Association
- Africa Centre
National Ecosystem Fund
The National Ecosystem Fund (NEF) supports not-for-profit Black-owned and Black-led businesses and organizations across Canada, seeking to provide support, mentorship, financial planning and business training for aspiring Black business people.
The NEF is currently closed, with over 200 applications submitted. Continued reviewing of projects is currently being orchestrated by regional development agencies and those accepted will be contacted by fall.
Black Entrepreneurship Knowledge Hub
The Black Entrepreneurship Knowledge Hub (BEKH) conducts research on Black entrepreneurship in Canada. It helps identify barriers to success and growth opportunities. The Hub is led by not-for-profit Black community and business organizations partnered with educational institutions.
Innovation, Science, and Economic Development Canada is currently in the reviewing process and will communicate with successful applicants in the weeks to come.
Having different application processes, the general eligibility for those interested are as follows:
- Self-identify as Black or Black-led (majority ownership of greater than 51 per cent by Black Canadians).
- Be a legal resident of Canada: e.g. Canadian citizen or permanent resident, or conventional refugee (for microloans only), or a legal entity owned and controlled.
- Be a Canadian citizen or citizens.
- Be a minimum of 18 years old.
Eligibility for businesses are:
- Start up and existing for-profit small businesses in Canada.
- Can be corporations or sole proprietors and for-profit social enterprises.
- Must have a business plan.
- Must have a business registration.
Recent financial statements OR Financial projections for start-ups
Not-for-profit organizations are NOT eligible for loans.
For more information
Priscilla Wiredu is a writer for this year’s Black Voice project. An alumni of York University, she graduated with Honors where she studied Social Sciences. She then went on to get an Ontario Graduate certificate in Creative Writing from the Humber School for Writers, and a college certificate in Legal Office Administration at Seneca College. She is currently studying for the LSAT in hopes of going to law school. Her main goal as a Black Voices writer is to ensure Black issues and Black Pride are enunciated through her works.