Futurpreneur Startup Program (formerly: Startup Collateral-free Loans)
$60,000.00
In-Kind Support, Loan
Description:
Futurpreneur Startup Program offers financing to aspiring young business owners to secure financing and launch successful businesses across Canada.This also offers mentorship program that can go up to 2 years which offers expertise, resources and skill-building opportunities to take you and your business to the next level.
Comments on Funding:
Financing (collateral-free loans) is up to $60,000: $20,000 comes from Futurpreneur and $40,000 from Business Development Bank of Canada.
Loan is repayable in 5 years.
Futurpreneur Canada loan terms and fees:
1. up to $20,000 with a term over five years;
2. interest is charged at CIBC’s prime rate + 3%;
3. interest-only payments for the first year;
4. principal repayments are made in equal monthly instalments together with interest, over the remaining four years;
5. no penalty for early repayment;
6. a one-time loan management fee of 1% of the total loan amount is charged at time of disbursement.
BDC loan terms and fees:
1. up to $40,000 in financing;
2. interest-only repayment in the first year;
3. the interest charged is the BDC Floating Base Rate* + 1.65%;
4. repayment of outstanding BDC principal by monthly repayment schedule similar to the applicant’s Futurpreneur Canada loan. The applicant may prepay all or any part of the outstanding principal, however, BDC must receive the interest owing to the time of repayment, together with an indemnity equal to three months’ interest on the principal prepaid;
5. Once a year (non-cumulative) on the anniversary date of the loan authorization date, the applicant may repay 15% of the principal outstanding without indemnity;
6. BDC charges a $50 processing fee, which is deducted from the initial loan disbursement;
7. Applications are subject to BDC approval and eligibility criteria. Some restrictions may apply.
Continuous Intake
Eligibility:
The applicant must:
1. be aspiring business owners aged 18 to 39.
2. be a Canadian citizen or permanent resident currently living in Canada.
3. fit the eligibility criteria:
a) Demonstrate some training/experience related to his business idea.
b) Create full-time sustainable employment for the applicant(s).
c) Agree to work with a mentor for up to two years.
d) Produce a complete and viable business plan by the end of the application process.
e) Business fully operating for fewer than 12 months.
f) Agree to complete Futurpreneur Canada status updates every month.
g) Agree to provide authorization for Futurpreneur Canada to carry out a credit check.
h) Supply two personal references.
i) Assure that the business is NOT in the research and development stage.
j) Assure that financing proceeds may not be used for refinancing existing debt.
k) BDC financing through a Futurpreneur Canada application is not available to all persons, corporations, firms and companies who are already a BDC borrower.
l) Have a business plan that falls within specified industry guidelines in order to be approved for financing. All BDC loans are subject to the eligibility criteria of the BDC.
m) Demonstrate that he has been discharged from bankruptcy for at least five years or one year after receipt of a Certificate of Full Performance in the case of a Consumer Proposal.
n) For establishments serving alcohol, a maximum of 49% of revenues can be generated from the sale of alcohol when same is consumed on-site. Exempt from this are producers such as craft breweries, wine and spirit producers, brew-it-yourself type locations.
o) Any age eligible entrepreneur (18-39 years old) who owns 5% or less of the business does not need to be party to Futurpreneur Canada and BDC application.
p) The amount invested, or to be invested in the Business, by the persons other than BDC and the character of the investment are such that a reasonable lender may expect that those persons will have a continuing commitment to the business An amount of 10% of the total project plan financing will in general be considered as sufficient for the entrepreneur investment.
Additional eligibility criteria for partnerships and incorporated businesses:
1. Age-eligible applicants) must have at least 51 per cent of the voting shares and be involved in the day-to-day management of the business.
2. Age-eligible partners who are able to demonstrate shareholder ownership of 5% or less are not required to apply.
Additional eligibility criteria for incorporated businesses with more than two shareholders:
1. If there are more than two shareholders, those who meet the age criteria must collectively hold the majority of the voting shares, be involved in the day-to-day management of the business, and take direct responsibility for operational liability.
Additional eligibility criteria for entrepreneurs interested in purchasing an existing business through a succession plan:
1. Applicants must meet all general eligibility criteria, except that the requirement to attain 51 percent ownership is delayed until the fifth year of operation.
Application Steps:
1. Register online for the Start-up Program.
2. Share a draft business plan and cash flow (Futurpreneur can help if you don’t have one!)
3. Futurpreneur will check credit score and business plan to make sure applicants are eligible.
4. Submit supporting documents, including a final, complete business plan and cash flow, business registration and ID.
5. The application will be reviewed.
Documentation Needed:
Applicants must submit:
1. a draft business plan and cash flow;
2. final business plan and cash flow statement,
3. business registration and
4. ID.
Other Things to Note:
Futurpreneur Canada is a non-profit organization supporting Canadians aged 18-39 to become business owners with loan financing, mentoring and business resources.
About the author
Maurice
