The Aboriginal Business Development Fund was established so that indigenous entrepreneurs with more limited borrowing options have access to capital. New businesses are offered advice, management training, and loans, and the fund itself is run by indigenous community organizations. The goal is to improve access to capital and the business climate in local communities.
Financing up to $250,000 is offered to entrepreneurs who need funds to refinance, expand existing operations, or buy or start a new business. There are eligibility criteria to meet to get approved, and loan amounts vary based on age. Applicants living off or on reserve qualify provided that they are non-status or status Inuit, Metis, or First Nations Aboriginals. Only applicants who own at least 51 percent of the business qualify for financing. Younger persons (35 years and younger) are also offered financing at competitive interest rates. They qualify for business loans of up to $15,000. Under the Aboriginal Business Development Program, indigenous entrepreneurs are offered business-related resources and information, support, and financial assistance. The activities covered include assistance for start-ups, business planning, and growth.
The Business Development Bank of Canada has already approved $1 million for 4 funds across Canada. Funding varies in amount of up to $20,000. Entrepreneurs apply for financing under the program and are extended loans with terms of 2 – 3 years. Here is an example of loans for vehicles and machinery that are to be paid off in full while funding is offered through community-based organizations.
Entrepreneurs fill in an application form and provide information such as economic benefits for local communities, time lines, administrative structure and arrangement, organizational structure, management capacity, justification of costs, and sources of financing. Applicants also include details such as loan purpose and uses, project scope, objectives and description, and schedule. In addition, entrepreneurs provide information on compliance with land tenure and environmental requirements and relevant regulatory requirements and legislation. Applicants who meet the criteria are offered access to credit, and the limits are different for community-owned businesses and individuals.
Other Options for Indigenous Entrepreneurs
Another option is to apply under Aboriginal Business and Entrepreneurship and Development which offers a range of services, including mentoring, training, financial services, and assistance with operating costs and new process and product development. Entrepreneurs also benefit from assistance with marketing initiatives, expansions and acquisitions, start-up costs, and business planning. There are also regional business funding programs that are tailored to the needs of aboriginal entrepreneurs. The First Nations and Metis Fund and the Clarence Campeau Development Fund are two examples.