Comments on Funding:
Financing (collateral-free loans) is up to $60,000: $20,000 comes from Futurpreneur and $40,000 from Business Development Bank of Canada.
Loan is repayable in 5 years.
Futurpreneur Canada loan terms and fees:
1. up to $20,000 with a term over five years;
2. interest is charged at CIBC’s prime rate + 3%;
3. interest-only payments for the first year;
4. principal repayments are made in equal monthly instalments together with interest, over the remaining four years;
5. no penalty for early repayment;
6. a one-time loan management fee of 1% of the total loan amount is charged at time of disbursement.
BDC loan terms and fees:
1. up to $40,000 in financing;
2. interest-only repayment in the first year;
3. the interest charged is the BDC Floating Base Rate* + 1.65%;
4. repayment of outstanding BDC principal by monthly repayment schedule similar to the applicant’s Futurpreneur Canada loan. The applicant may prepay all or any part of the outstanding principal, however, BDC must receive the interest owing to the time of repayment, together with an indemnity equal to three months’ interest on the principal prepaid;
5. Once a year (non-cumulative) on the anniversary date of the loan authorization date, the applicant may repay 15% of the principal outstanding without indemnity;
6. BDC charges a $50 processing fee, which is deducted from the initial loan disbursement;
7. Applications are subject to BDC approval and eligibility criteria. Some restrictions may apply.
The applicant must:
Additional eligibility criteria for partnerships and incorporated businesses:
Additional eligibility criteria for incorporated businesses with more than two shareholders:
Additional eligibility criteria for entrepreneurs interested in purchasing an existing business through a succession plan:
Applicants must submit:
- a draft business plan and cash flow;
- final business plan and cash flow statement,
- business registration and
Other Things to Note:
Futurpreneur Canada is a non-profit organization supporting Canadians aged 18-39 to become business owners with loan financing, mentoring and business resources.