Black Entrepreneurship Loan Fund




The Black Entrepreneurship Loan Fund, a component of the Black Entrepreneurship Program, is a partnership between the Government of Canada, Black-led business organizations, and several financial institutions. It supports access to capital for Black business owners and entrepreneurs.

Alterna Savings is proud to lend our 20+ year expertise in microfinance to the Loan Fund. We are also proud to be inaugural participants in the Fund’s pilot micro-loan program. Alterna will be helping to fill a gap in the marketplace with a pilot program in Ontario offering micro-loans between $10,000-$25,000.

Overall, the Loan Fund will offer loans ranging from $10,000 - $250,000 administered by the Federation of African-Canadian Economics (F.A.C.E.). F.A.C.E. is a federally incorporated not-for-profit created by a group of Black Business Support Organizations (BBSOs) from across Canada.


ELIGIBILITY & HOW TO APPLY

To determine your eligibility for the Loan Fund and to submit an application, please enter your information and you’ll be directed to the F.A.C.E. website.




FAQ's

General Information

What is the Black Entrepreneurship Loan Fund? Expand/Collapse

The Black Entrepreneurship Loan Fund, a component of the Black Entrepreneurship Program, is a partnership between the Government of Canada, Black-led business organizations, and several financial institutions. The Fund will provide loans of up to $250,000 to Black business owners and entrepreneurs across Canada. 

Which entity will administer the Government of Canada’s contribution to the Loan Fund? Expand/Collapse

The Federation of African-Canadian Economics  (F.A.C.E.) is the legal entity designated to administer the government contribution to the loan fund. It is a federally incorporated not-for-profit created by a group of Black Business Support Organizations (BBSOs) from across Canada.

Which organizations make up the Federation of African-Canadian Economics (F.A.C.E.)? Expand/Collapse

F.A.C.E. is made up of five prominent Black Business Support Organizations (BBSOs) that joined forces to create the organization. Collectively, the group has more than 35 years of experience serving Black Canadian business communities. The founding members are: 

  1. Cote des Neiges Black Community Association
  2. Groupe 3737
  3. Black Business Initiative
  4. Black Business and Professional Association
  5. Africa Centre

Do I need to be an Alterna Savings member to apply for the Loan Fund? Expand/Collapse

It is not a requirement to be an Alterna Savings member to apply for the Black Entrepreneurship Loan Fund.

I am an Alterna Savings member. Do I still need to apply through F.A.C.E. for the Loan Fund? Expand/Collapse

Yes, all Loan Fund applications must flow through F.A.C.E. Feel free to indicate that we are your financial institution of choice.

What are the Terms and Conditions of the loans? Expand/Collapse

For more information about the Terms and Conditions of the loans, go to the F.A.C.E. website here.

What is the goal of this initiative? Expand/Collapse

The goal of this initiative is to create a robust and efficient pathway to access to capital for Black entrepreneurs.

Why did the Government of Canada create a Loan Fund specifically for Black entrepreneurs and business owners? Expand/Collapse

Black Canadian business owners and entrepreneurs make important contributions to the Canadian economy, yet they continue to face systemic barriers in starting and growing their businesses. This has been further exacerbated by the COVID-19 pandemic. The Government of Canada is working to address these long-standing, systemic barriers with its first-ever Black Entrepreneurship Program.

The Loan Fund is an important step in helping Black business owners and entrepreneurs get the financial support they need so they can start up, scale up and grow across Canada and the world. It also demonstrates the government’s commitment to addressing these systemic barriers with long-term solutions by co-developing programs to better support Black entrepreneurs on their road to success.

Eligibility

Who is eligible under the Black Entrepreneurship Loan Fund? Expand/Collapse

To be eligible for a loan, an applicant must:
  • Self-identify as Black or black-led (majority ownership of >51% by Black Canadian);
  • Be a legal resident of Canada (Canadian citizens, permanent residents, or conventional refugees), or a legal entity owned and controlled by a Canadian citizen or citizens; and
  • Be a minimum of 18 years.

What qualifies as a Black-led business? Expand/Collapse

F.A.C.E is the final decision maker but to be eligible for the Loan Fund, the business must self-identify as Black or as a black-led (majority ownership of >51% by Black Canadian).

What businesses are eligible under the Loan Fund? Expand/Collapse

Eligible businesses may include start-ups and existing for-profit small businesses in Canada. Such businesses can be corporations, sole proprietors, or partnerships.

What businesses are not eligible under the Loan Fund? Expand/Collapse

Not-for-profit organizations are not eligible for loans.

What is eligible for financing under the Loan Fund? Expand/Collapse

Loans can 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) 

What is not eligible for financing under the Loan Fund? Expand/Collapse

Loans cannot 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.

This list is not exhaustive. When in doubt, speak with your assigned account manager.

Loan Criteria

How much can be financed and what is the maximum loan amount I can access under the Black Entrepreneurship Loan Fund? Expand/Collapse

The loan fund will offer loans up to $250,000. F.A.C.E. can provide loans of up to $100,000. Loans above this amount will be risk shared with financial institutions

Credit Unions will offer loans between $10,000-$25,000, while banks, including VanCity will offer loans between $25,000- $250,000.

Who will process the loan applications? Expand/Collapse

The processing of loans is a shared process between F.A.C.E. and participating financial institutions. F.A.C.E. is the initial entry point for all Black-owned Enterprises interested in applying for a loan. Loan applications will be reviewed by F.A.C.E. and the underwriting (fulfillment) process will be shared by the partnering financial institutions.

How to Apply

Where can I apply for the Black Entrepreneurship Loan Fund? Expand/Collapse

The F.A.C.E. loan portal, accessible at www.facecoalition.com, will act as the electronic and initial in-take process for interested applicants to the loan fund. Loan applicants will be able to submit and communicate with a F.A.C.E. client relationship manager on the progress of their loan request.

When will applications begin to be accepted? Expand/Collapse

The loan fund will start accepting applications on May 31, 2021.

How long will it take to turn around applications? Expand/Collapse

This depends on the type of applications received and the due diligence that is required by the loan administrator and the financial institution. As a result, the timelines will vary based on individual circumstances. However, there is a firm commitment to work with applicants to review their loan applications.

How will entrepreneurs served by other BBSOs get access to the Loan Fund? Expand/Collapse

The F.A.C.E. model is inclusive. It is designed in a way to allow other Black Business Support Organizations (BBSOs) from across the country to participate in the evolution of the entity and submit loan applications for consideration. This ensures Black Canadians, irrespective of where they live and which BBSO they may work with, have an opportunity to access loans from the fund.

If I cannot access financing under the Black Entrepreneurship Loan Fund, where can I go for additional information? Expand/Collapse

F.A.C.E. intends to refer applicants whose loan application was not approved to corresponding regional F.A.C.E. member organizations and affiliates for further capacity building to support to their reapplication at a later time.

Another option could be to visit the Canada Business website to explore government funding options that might better suit your needs.

The  Regional Development Agencies also provide a variety of business support services, including the delivery of the Ecosystem Fund component of the Black Entrepreneurship Program.


Black Entrepreneurship Program

The Black Entrepreneurship Program (BEP) is a partnership between the Government of Canada, Black-led business organizations, and several financial institutions (FIs).

This initiative aims to create a robust and efficient pathway to access to capital for Black entrepreneurs – using financial institutions and government support.

The BEP has three main components:

  • National Ecosystem Fund: this initiative will support not-for-profit Black-led business organizations across the country in their capacity to provide support, mentorship, financial planning, and business training for Black entrepreneurs.
  • Knowledge Hub: the BEP Knowledge hub will conduct research on Black entrepreneurship in Canada. It will help identify barriers to success and opportunities for growth.
  • Loan Fund: The Loan Fund will offer loans ranging from $10,000 - $250,000 to Black business owners and entrepreneurs across the country to start, build and grow their businesses.





To learn more about the Federation of African Canadian Economics (FACE); please visit https://facecoalition.com.