Are you between 18-39 of age, and need financing (not grants) for your startup? Well, there is a program run by Business Development Canada (BDC) and Futurpreneur that is accepting applications. This program is targeted towards young entrepreneurs.
Under this program, if your application has been accepted, you will be eligible for a collateral-free loan of up to CAD 60,000 with better interest rates and two years of expert mentorship.
The loans are offered by both agencies.
The first 20k comes from Futurpreneur under the following conditions:
- Up to $20,000 with a term over five years.
- Interest is charged at CIBC’s prime rate + 3.00%.
- 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.
If this financing is not sufficient, the BDC will come up with up to 40k. Their conditions are:
- 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 your Futurpreneur Canada loan. You 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, you may repay 15% of the principal outstanding without indemnity.
- BDC charges a $50 processing fee, which is deducted from the initial loan disbursement.
What you have to do:
- Register for the Start-up Program.
- Share a draft business plan and cash flow (Futurpreneur can help if you don’t have one).
- Submit supporting documents, including a final, complete business plan and cash flow.
- If successful, you’ll be assigned a mentor and get an orientation.
- Provide updates as needed and continue working with your mentor.
For more information and application information: