BOF Black Business Loan Program
BOF Black Business Loan Program
If you are a Black Canadian entrepreneur with a sustainable business model, who has been declined lending by a Canadian financial institution in the last 2 years, you may qualify to apply for up to $50,000 in financing to help you grow and advance your business. Please note, there will be a personal credit check to assess your eligibility. Completing an application does not guarantee your approval.
Please read restricted business loan criteria
Black Opportunity Fund is committed to help dismantle the impacts of systemic anti-Black racism, by providing funding and helping to build the capacity of Canadian Black led businesses, as well as Black led, Black community serving charities and not for profit organizations.
Wrap-around Support Partner
As part of the $10M, 5- year investment by TD Bank, BOF is launching an inclusive lending program for Black entrepreneurs who have been unable to secure funding through Canadian financial institutions. Following extensive consultations with Black entrepreneurs in communities across Canada, Black Opportunity Fund has built a lending capacity and support network with an anti-oppression lens, that will ensure that Canadian Black entrepreneurs will have a well-capitalized and thoughtful lending partner in BOF. Loans will be in the range of $10,000 to $50,000.
We are pleased to be working in collaboration with the Afro Caribbean Business Network (ACBN) who is a trusted community delivery partner with a history of providing capacity building support for Canadian Black entrepreneurs.
Step 1: Complete the application form
Once you’ve completed the application form, that sends a notification to express your interest in obtaining a loan. The Afro Caribbean Business Network (ACBN) will review your submission to ensure all the required documents have been provided. The application should not be completed by a 3rd party. Consent must be provided by the owner(s) operating the company and they should understand the details in the documentation submitted for review.
ACBN may also refer applicants for capacity development support if they identify that the documents submitted are incomplete. We strongly encourage interested entrepreneurs to review the eligibility requirements before applying. If an entrepreneur applies without having the required documents, that will delay the process to assess providing a loan.
Step 2: Referral to assess your loan application
Once ACBN confirms that the applicant has provided all the required information, BOF will make a referral to a financial institution to assess your loan application. The applicant will need to resend all the required documents initially submitted to BOF directly to the financial institution reviewing the loan request.
Step 3: Loan decision
After your loan request has been reviewed by the financial institution, BOF will follow-up directly with the applicant to share the final decision.
The Need
- Black business owners are disproportionately rejected in loan applications (only 31% of Black businesses receive all funding applied for vs 49% for White businesses; and 38% of Black businesses receive none of the funding applied for)
- COVID-19 has resulted in a 41% decline in Black businesses (vs. only 22% for non-Black businesses)
- Many Black businesses operate as sole proprietorships, which has been a hurdle when it comes to qualifying for government grants and bank loans.
- Many Black businesses lack generational wealth or family and friends with capital, making traditional bank adjudication processes involving collateral, personal guarantees and minimum credit scores a problem.
- Systemic racism impacts most Black entrepreneurs: 76% of Black entrepreneurs said their race makes it harder to succeed as an entrepreneur.
- Access to capital is the greatest barrier for Black entrepreneurs: 75% say that if they needed to find $10,000 to support their business, it would be difficult.
- Low trust in banks: Only 19% of respondents said they trust banks to do what is right for them and their community.
- Networks and support are critical to supporting Black entrepreneurs: A majority of Black entrepreneurs said they do not know how to access supports or advice when challenges arise in their business.
*Source – 2021 Abacus Data study by African Canadian Senate Group and Senator Colin Deacon
BOF Black Business Loan Program Eligibility Criteria
(a) Must be organized as a sole proprietorship, partnership, or incorporated/continued under a relevant Canadian federal or provincial corporate statute governing business corporations
(b) If a sole proprietor, must:
(i) self-identify as Black;
(ii) be over 18 years of age at the time the loan application is submitted; and
(iii) be a Canadian citizen, Permanent Resident or Convention Refugee*, with a legal right to work in Canada
(c) If a corporation or partnership, a majority (51% or more) of the shareholders or partners (or shareholders of partners), as applicable, must self-identify as Black and all shareholders, partners (or shareholders of partners), as applicable, must be:
(i) over 18 years of age at the time the loan application is submitted;
(ii) Canadian citizens, Permanent Residents or Convention Refugees*, with a legal right to work in Canada; and
(iii) unable financially to provide a guarantee to or offer collateral on a loan for the applicant.
(d) Must have a web presence, which may include a website and/or social media page that mentions the contact information (phone number and address) and name of the business applying for a loan.
(e) Must be solvent
(i) Bankruptcy: The owner(s) must not be currently in bankruptcy proceedings.
(ii) Major Delinquencies: The owner(s) should not have records of default or significantly overdue payments.
(f) Must provide the following documents:
(i) Certificate of incorporation (in the case of corporations), or master business license (in the case of partnerships and sole proprietorships)
(ii) a detailed business plan
(iii) if operating for more than 18 months, most recent financial statements (Statement of Financial Position, also referred to as the Balance Sheet, Statement of Profit or Loss, also referred to as Income Statements) and a 36-month projected cash flow statement
(iv) if operating for less than 18 months, a 36-month projected cash flow statement
(v) proof that business taxes/remittances are up to date (including, corporate tax filings, GST/HST remittances, and payroll taxes (if applicable))
(vi) evidence that the sole proprietor, partnership, or corporation has been unable to obtain a loan from a traditional banking institution at market rates, which shall include at a minimum:
(vii) the details pertaining to the applicant’s attempt(s) at securing a loan;
(viii) the contact information of the representative of the banking institution with which the applicant communicated.
(g) Must provide consent to BOF to permit BOF to contact the banking institution(s) from which the applicant attempted to obtain a loan for the purpose of confirming that a loan could not be advanced to the applicant.
Please find a list of additional documents that may be required by the financial institution.
Please read restricted business loan criteria
*A Convention Refugee is a person who is outside of their home country or country where they normally live and fears returning to that country because of a well-founded fear of persecution for reasons of race, religion, nationality, membership in a particular social group or political opinion and who has been determined to be a Convention Refugee by a visa officer outside of Canada or by the Refugee Board of Canada. An applicant must prove that they are a Convention Refugee by submitting to BOF a photocopy of the letter they received with their positive decision from the Immigration and Refugee Board, or their Verification of Status Document received from Immigration, Refugees and Citizenship Canada.
Questions
Please reach out to BOF via email through our dedicated mailbox for the Black Business Loan Program. One of the members of our Programs Team will be happy to assist.
Other BOF supports for Black led Canadian Businesses
As part of its mandate to provide funding and capacity building support for Canadian Black-led businesses, Black Opportunity Fund (BOF) has established the Black Entrepreneur Program to provide Canadian Black entrepreneurs who have been unable to access traditional funding from financial institutions, with business education, financial literacy, skills training and support to help build their capacity and knowledge to operate successful, sustainable businesses.
Through extensive research and consultation, BOF recognizes the significant pain points faced by Black entrepreneurs who attempt to pursue business education and capacity-building support programs, as they have to sacrifice valuable time and related revenue from operating their businesses, or from ancillary employment to pursue these courses. To help overcome these barriers that significantly impact Black entrepreneurship, BOF is pleased to be disbursing non repayable funds to entrepreneurs enrolled in the various CBCC programs administered through this initiative, throughout the duration of their enrolment.
Learn more: https://blackopportunityfund.ca/funding-programs/black-entrepreneur-program/
BOF Investment Program – Coming Soon
Black Opportunity Fund is currently building the infrastructure and developing our investment thesis, for an investment entity, and will shortly begin searching for Black businesses to invest in.