Black, women and social entrepreneurs in Ontario who have received up to $25,000 in funding through an Alterna Savings program now have the chance to double that amount through a new plan with the Business Development Bank of Canada (BDC).
“We are excited to work with BDC on this enhanced lending program," said Rob Paterson, President and CEO of Alterna Savings. "Black entrepreneurs, social entrepreneurs and women entrepreneurs all face inequitable access to financial support and they deserve an equal opportunity to build thriving, successful businesses."
Access to funding is a large barrier
Studies show that for these three entrepreneurial groups, access to funding is the most prominent barrier to starting or scaling their businesses. The Senate Small Business & Entrepreneurship Committee recently reported that women business owners account for fewer than 5 per cent of all the capital lent to small companies, even though 30 per cent of small companies in Canada are owned by women. Successful women entrepreneurs operating high-growth businesses also face significant difficulties raising the capital needed to transition to larger and more established companies.
Similarly, in a study sponsored by BDC, the Canadian Black Chamber of Commerce reports that Black business owners are less likely to apply for formal financing with 71 per cent using "bootstrapping" – or personal finances – as their main funding source.
Social entrepreneurs face restrictions on how funding is used
Social entrepreneurs start enterprises with the aim of solving societal problems or effecting social change. The financial challenges they face often stem from their business success metrics, which can prioritize solutions rather than profits. The financing models that currently exist tend to have restrictions on how the funding is used.
"At BDC, our purpose is to ensure all entrepreneurs have access to the resources, financing, advice, networks and tools they need to succeed," said Isabelle Hudon, President and Chief Executive Officer of BDC. "Diversity, equity and inclusion are part of BDC's values and guide our support. We are pleased to work alongside Alterna to increase access to capital for Black, women and social entrepreneurs that will help them grow their businesses."