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:
- up to $20,000 with a term over five years;
- interest is charged at CIBC’s prime rate + 3.75%;
- interest-only payments for the first year;
- principal repayments are made in equal monthly instalments together with interest, over the remaining four years;
- no penalty for early repayment;
- a one-time loan management fee of 1% of the total loan amount is charged at time of disbursement.
BDC loan terms and fees:
- up to $40,000 in financing;
- interest-only repayment in the first year;
- the interest charged is the BDC Floating Base Rate* + 1.65%;
- 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;
- 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;
- BDC charges a $50 processing fee, which is deducted from the initial loan disbursement;
- Applications are subject to BDC approval and eligibility criteria. Some restrictions may apply.
The applicant must:
- Demonstrate some training/experience related to your business idea.
- Create full-time sustainable employment for the applicant(s).
- Agree to work with a mentor for up to two years (4 to 5 hours a month).
- Produce a complete and viable business plan by the end of the application process.
- Business fully operating for fewer than 12 months.
- Agree to complete Futurpreneur Canada status updates every month.
- Agree to provide authorization for Futurpreneur Canada to carry out a credit check.
- Supply two personal references.
- Assure that the business is NOT in the research and development stage.
- Assure that financing proceeds may not be used for refinancing existing debt.
- BDC financing through a Futurpreneur Canada application is not available to all persons, corporations, firms and companies who are already a BDC borrower.
- Have a business plan that falls within specified industry guidelines in order to be approved for financing. All BDC loans are subject to the eligibility criteria of the BDC.
- Demonstrate that he has been discharged from bankruptcy for at least five years or one year after receipt of a Certificate of Full Performance in the case of a Consumer Proposal.
- For establishments serving alcohol, a maximum of 49% of revenues can be generated from the sale of alcohol when same is consumed on-site. Exempt from this are producers such as craft breweries, wine and spirit producers, brew-it-yourself type locations.
- Any age eligible entrepreneur (18-39 years old) who owns 5% or less of the business does not need to be party to Futurpreneur Canada and BDC application.
- The amount invested, or to be invested in the Business, by the persons other than BDC and the character of the investment are such that a reasonable lender may expect that those persons will have a continuing commitment to the business An amount of 10% of the total project plan financing will in general be considered as sufficient for the entrepreneur investment.
Submit supporting documents, including a final, complete business plan and cash flow, business registration and ID.
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.
- Futurpreneur also provides this loan to Black entrepreneurs and Indigenous entrepreneurs
- Futurpreneur works with a range of partners to support young, Indigenous entrepreneurs across Canada. (see entry: Nishnawbe Aski Development Fund (NADF) and Futurpreneur Canada – Aboriginal Youth Entrepreneurship Program (AYEP)).