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

The Business Development Bank of Canada is committing $250 million in funding, training and investment funding to companies led by black, Indigenous and women entrepreneurs.

The funds aim to address a persistent gap in support for entrepreneurs from underrepresented communities who face barriers due to systemic racism and discrimination, the BDC said Wednesday. Despite a decline in the overall number of entrepreneurs in Canada, the number of Indigenous and black-led businesses is growing.

“It’s part of our mission to make sure that all entrepreneurs, and certainly those who 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, among women too – who are not a minority. We see that and we hear from them that they still face barriers that we think we can help them overcome.”

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

In 2020, the Canadian Council on 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 growing each year, reaching 18 percent of all Canadian businesses in 2023, according to the Women’s Entrepreneurship Knowledge Centre.

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 allocated for loans and training for entrepreneurs whose companies generate less than $3 million in revenue. The educational aspect is aimed at businesses looking for help with aspects such as drafting their business plans or cash flow projections.

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

“In the business world, people have unconscious biases and people invest in people who look like them. So if all the people investing in is a 60-year-old white male, they’re only going to invest in those people,” she said.

mrs. Fleurant said her company is in the midst of commercializing its product, and she hopes to take advantage of the new BDC funding in the form of loans or training.

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

He said Trillion will most likely use 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 funds, we will 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. The BDC said the new programs are in addition to a $500 million fund it launched two years ago to invest in companies run by women.

Editor’s note: (June 20, 2024): An earlier version of this article incorrectly stated that the $500 million BDC fund was created to invest in companies that are majority owned by women. Finds investments in women-led companies that may have other investors. The article has also been updated to clarify that it is the $50 million program that will be overseen by a new Inclusive Enterprise team.