New $250-million federal fund to invest in Black, Indigenous and female entrepreneurs

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Business Development Bank of Canada is committing $250-million in financing, training and investment funding for companies led by Black, Indigenous and female entrepreneurs.

The funds are aimed at addressing a lingering gap in support for entrepreneurs from underrepresented communities who face obstacles because of systemic racism and discrimination, BDC said Wednesday. Despite a dip in the total number of entrepreneurs in Canada, the number of Indigenous and Black-led businesses is on the rise.

“It is part of our mission to make sure that all entrepreneurs, and certainly those that are underserved for whatever reason, are getting what they need,” said Sandra Odendahl, BDC’s head of sustainability, diversity and social impact.

“And we still see the need, definitely in the Indigenous and Black community and actually, even among women – who are not a minority. We see that and hear from them that they still face barriers that we think we can help them to overcome.”

BDC is a Crown corporation that provides financing, investment capital and advisory services to small and medium-size enterprises. The bank estimates that over the past decade the number of Black-owned businesses in Canada with employees has grown more than 60 per cent and the same statistic for Indigenous-owned businesses has grown more than 8 per cent.

In 2020, the Canadian Council for Indigenous Business reported that Indigenous people in Canada were creating new companies at nine times the national average. Female entrepreneurs lag behind men in earnings, but the number of women-owned businesses in Canada is also rising annually, reaching 18 per cent of all Canadian businesses in 2023, according to the Women Entrepreneurship Knowledge Hub.

The bank is creating two $100-million funds to lend and make equity investments to Indigenous and Black-owned businesses. Another $50-million will be set aside for loans and training for entrepreneurs whose companies generate revenues of less than $3-million. The educational aspect is directed at businesses that require help with aspects such as devising their business plans or cash-flow projections.

Farnel Fleurant, founder of employee benefits platform Workind, said the financing is good news for Black entrepreneurs like herself who face difficulty accessing capital or building networks.

“In the business world, people have unconscious bias, and people invest in people that look like them. So, if all the people who invest are a white male of 60 years old, they will invest in only those people,” she said.

Ms. Fleurant said her company is in the midst of commercializing its product and she hopes to benefit from BDC’s new financing in the form of loans or training.

Benoit Loyer, a partner and broker at the commercial real estate agency Trillion and member of the Mi’gmaq community of Listuguj in Quebec, said financing for businesses owned by First Nations, Métis and Inuit people can help advance economic reconciliation by increasing the number of Indigenous people hired and improving their visibility in the corporate world.

He said Trillion is most likely to make use of the program to help increase its market share and create more jobs.

“Right now, we are representing clients in Quebec, but by expanding and getting access to some of the funding, we would definitely be able to reach more people and implant ourselves in the rest of Canada,” Mr. Loyer said.

A new Inclusive Entrepreneurship team will oversee the $50-million program, while BDC Capital, the bank’s investment arm, will lead the $200-million commitment to Black and Indigenous-led businesses. BDC said the new programs are in addition to a $500-million fund it set up two years ago to invest in companies that are women-led.

Editor’s note: (June 20, 2024): A previous version of this article incorrectly said the $500-million BDC fund was set up to invest in companies that are majority-owned by women. The find invests in companies that are women-led, and which may have other investors. The article has also been updated to clarify it is the $50-million program that will be overseen by a new Inclusive Entrepreneurship team.