The Canadian government is hoping to make the entrepreneurial playing field more even for Black business owners with the launch of a $291.3 million Black Entrepreneurship Loan Fund.
The loan fund is an extension of the Black Entrepreneurship Program — a partnership between the Canadian government and Black-led business organizations, and financial institutions — that creates access to loans of up to $250,000. Government officials suggest allocating specific funds to launch and aid the growth of Black businesses removes systemic barriers that prevent Black entrepreneurs from securing loans.
Prime Minister Justin Trudeau said Black entrepreneurs are part of an economic recovery plan of inclusivity given the financial setbacks of the pandemic. “The small businesses that Black entrepreneurs create are the backbones of out communities,” said Trudeau during a September supporting Black entrepreneurs news conference. “An investment in Black excellence is an investment in economic empowerment., and economic empowerment is an essential part of justice.”
“This is a meaningful historic step to correct a historic wrong: the systemic barriers in accessing financing faced by people of African descent. We need to build a more inclusive economy,” said Greg Fergus, parliamentary secretary to the prime minister.
Months prior, Canadian Black Chamber of Commerce President Christelle Francois said the country needed to give its Black population of business owners a chance to “succeed and thrive.” “It’s good for the business, it’s good for the people loaning the money, it’s good for our whole economy,” said Francois.
Throughout the pandemic, businesses have struggled to stay afloat, but for small businesses, the fight to remain open has been especially challenging. Last year, as a response to aid businesses strapped for cash, the government launched the Canada Emergency Business Account (CEBA) program.
CEBA provides loans of up to $40,000 to small and medium-sized businesses. But when it comes to Black-led business, owners were at a disadvantage and seldom approved for the funds. In June, the Canadian Black Chamber of Commerce said 20,000 Black-owned businesses were ineligible for the funds because they weren’t registered, failed to meet size requirements, or did not have a payroll between $20,000 and $1.5 million the previous year.
Other hurdles that challenge eligibility for other programs include the lack of generational wealth in the Black community, lack of access to investors with the necessary capital, or inability to meet minimum credit scores. “Based on our very small sampling size that definitely a majority of those companies are mostly challenged,” said Michael Forrest, founder and chairman of the chamber of commerce, to the CBC.
Black Entrepreneurship Loan eligibility requirements include:
- Businesses must be majority-owned by a Black Canadian
- Business should be a start-up or existing for-profit small businesses in Canada, including sole proprietorships, social enterprises, partnerships, or co-operatives
- Businesses must have a business number, a business plan, and financial statements or projects for start-ups
“While more work remains to be done, our government is committed to continuing to work with Black communities across Canada to ensure that we build back even better and consciously more inclusive,” said The Honorable Bardish Chagger, Minister of Diversity and Inclusion and Youth.
The loan fund pools money together from the Canadian government ($33.3 million), the Business Development Bank of Canada ($130 million), and several other financial institutions; meaning it does not pull money from existing programs that cater to entrepreneurs of all races. Still, news of a loan fund to assist Black people was met with harsh criticism and claims of racism.
“If this isn’t racism then I don’t know what is.”
“Why???They are not the only people in Canada…..stop wasting money on useless entities.”
“What makes black people so different and special that they get this kinda entitlement? You trying to create a privileged class?”
Some people even reiterated stereotypes of Black people not being able to properly manage money. “They will just waste the money,” wrote one person on Twitter.
Others, however, support the loan fund.
“I think you’re missing or purposely avoiding (?) the larger point here. BIPOC deserve equitable programs. This is one small step.”
“Should of been done years ago!”
