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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
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.
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.
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:
It is not a requirement to be an Alterna Savings member to apply for the Black Entrepreneurship Loan Fund.
Yes, all Loan Fund applications must flow through F.A.C.E. Feel free to indicate that we are your financial institution of choice.
For more information about the Terms and Conditions of the loans, go to the F.A.C.E. website here.
The goal of this initiative is to create a robust and efficient pathway to access to capital for Black entrepreneurs.
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
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.
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).
Eligible businesses may include start-ups and existing for-profit small businesses in Canada. Such businesses can be corporations, sole proprietors, or partnerships.
Not-for-profit organizations are not eligible for loans.
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)
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
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.
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
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.
The loan fund will start accepting applications on May 31, 2021.
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.
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.
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.
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.
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.
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