CFSF Business Loan Program

One of the most successful means that Community Futures (CF) have in fostering entrepreneurship in BC is their ability to provide business loans to entrepreneurs who have had trouble accessing capital from traditional lenders.

In addition to providing individualized business advisory services, our Community Futures operation can lend up to $300,000 to new and existing businesses for:

  • capital purchases,
  • operating capital,
  • inventory,
  • start-up costs,
  • top-up financing, and
  • expansion.

Loans received from a Community Futures are fully repayable and are offered at a competitive interest rate. In over ten years of lending to entrepreneurs in British Columbia, the CF’S, on average, have recorded an unprecedented financial institution repayment rate of 96%.

Arranging Financing:

Community Futures can help you arrange financing for your business through regular channels (banks, credit unions, and the Business Development Bank of Canada).

In addition, Community Futures can provide business development loans from their own funds, as well as by accessing specialized loans programs that target segments of the BC population that may face additional obstacles in securing business financing.

Business Loan Eligibility Requirements

  1. The applicant must be of legal age and a resident of Canada.
  2. The business must be located in the CFSF region, and the applicant must be involved in the day to day operation of the business.
  3. The business provides evidence that the loan will be used for activities that will promote stable growth, job creation and diversify the local/regional community.
  4. The loan(s) are to establish, expand, or preserve a business within the CFSF region. CFSF Region includes the geographic area that is West of the Township of Hope, East of the Greater Vancouver Regional District (272nd St.), South of the Fraser River and North of the US Border.
  5. The applicant must declare and provide evidence they have been declined financing by a traditional lender.
  6. CFSF requires copies of “Trade Certificates” for loans to trades related businesses.
  7. The applicant must have completed a Business Plan acceptable to CFSF.
  8. The applicant must have proof of personal equity investment in the business.  A minimum of 10% equity is generally required by CFSF based on the lesser of cost or market value.
  9. The applicant must complete all other required application forms plus and additional documentation requested by CFSF.
  10. Unless there are unusual or extenuating circumstances, applications will not be considered in any of the following situations;
    1. The applicant is in bankruptcy;
    2. The applicant has an outstanding court judgement;
    3. The applicant has outstanding collections;
    4. A credit check has revealed a major credit problem;
    5. The main purpose of the loan is to refinance current debt;
    6. The applicant is unable to provide proof of residency.
  11. The loan must be approved by the General Manager, Loans Committee or Board.

The Business Loan Application Process

Community Futures organizations provide small businesses with access to capital that might not otherwise be available from other financial institutions. Community Futures lending practices are directed by the Community Futures Program through Western Economic Diversification Canada.

Please note, we can only provide financing for businesses within our region ( Abbotsford, Bridal Falls, Chilliwack – District of, Chilliwack Lake, Columbia Valley, Greendale, Popkum, Rosedale, Sardis, Yarrow) who have not been successful in obtaining financing through conventional banking channels.

How Do I Apply for a CFSF Business Loan?

To apply for CFSF financing, please download a Business Loan Application Form and e-mail a signed copy to  Nicole.Read@southfraser.com or drop off a signed application at our Chilliwack office. If you have any questions, please call Nicole at 604-392-5133.

Once we have received a completed application, we will contact you to provide further information regarding the application process.

A business analyst will review your application to ensure it meets the following criteria:

  • Employment created or maintained predominantly in the region.
  • Business located in the South Fraser region.
  • 10% personal financial investment by the owner(s).
  • Ability to repay.
  • Future economic viability of the business.
  • Competent management and relevant operational skills.
  • Adequate security for the venture.
  • Credit history of the owner(s).
What Does a Complete Business Loan Application Consist Of?

Community Futures organizations provide small businesses with access to capital that might not otherwise be available from other financial institutions. Community Futures lending practices are directed by the Community Futures Program through Western Economic Diversification Canada.

Please note, we can only provide financing for businesses within our region ( Abbotsford, Bridal Falls, Chilliwack – District of, Chilliwack Lake, Columbia Valley, Greendale, Popkum, Rosedale, Sardis, Yarrow) who have not been successful in obtaining financing through conventional banking channels.

If you wish to apply for CFSF financing, please download a Business Loan Application Form and e-mail a signed copy to  Nicole.Read@southfraser.com or drop off a signed application at our Chilliwack office. If you have any questions, please call Nicole at 604-392-5133. Once we have received a completed application, we will contact you to provide further information regarding the application process.

A business analyst will review your application to ensure it meets the following criteria:

  • Employment created or maintained predominantly in the region.
  • Business located in the South Fraser region.
  • 10% personal financial investment by the owner(s).
  • Ability to repay.
  • Future economic viability of the business.
  • Competent management and relevant operational skills.
  • Adequate security for the venture.
  • Credit history of the owner(s).
What Are The Costs and How Long Does The Process Take, etc?

Costs

If you require specialized business planning and development services or training, fees may apply. We will pre-screen a loan application at no charge, however, a 1% application fee with a minimum fee of $75 will be administered should you wish us to proceed with a full evaluation. Additional administration fees may also apply, however, you will be informed of this in advance.

How long does it take?

Lending money takes time. How long depends on a number of factors, including the business plan development process, verifying assets, the amount and source of the funds, the time to complete legal work, and the time that it takes you to provide the necessary information and sign the documentation. Loans may take between 3 to 7 weeks once all the information has been collected.

Redress/Appeal Process

Community Futures has a clearly established appeals process clients can follow to raise concerns on loan request decisions.

In order for CFSF to remain transparent to the client they have the right to appeal loan decisions to the next level of our organization that is as follows:

  • For loans within the General Manager’s limit, the appeal is made to the Lending Committee.
  • For loans within the Lending Committee’s limit, the appeal is made to the Board.
  • For loans approved by the Board, the appeal is made to the CFBC Independent Service Review Panel.
What Does Community Futures Look For in a Business Loan Application?

The 5 C’s of Lending

When your local Community Futures staff and volunteer board assess the merits of your loan application, they take into account our own version of the classic banking industry guideline “The Five C’s of Lending.”

As we are developmental lenders – and because community economic development is our number one priority – we are able to interpret and prioritize lending criteria a bit differently than traditional banks.

Here’s some insight into the criteria we will use when we look at your loan application:

1. Character

Character is a combination of your credit history, your training and work history, and any proven experience you have at running a business. Most banks look primarily at how the loan will be secured. While this is also important to us, we value your personal experience and track record too. We’ll also want to know about the industry skills and management experience of your leadership team, because even the best business ideas don’t succeed without strong management. It’s all part of ensuring that you are set up for success in business – not just loan repayment!

2. Capacity

Capacity refers to your ability to take on and repay debt based on the earning potential and cash flow of the business. We look at your business plan very carefully to determine the strength and marketability of your idea as well as the viability of the business. It is therefore very important that you take the time to carefully research and thoroughly test your business concept. We also want to make sure there will be adequate cash flow, to ensure that you can realistically afford the loan. If you are asking for a loan for an existing business, we’ll look carefully at your historical financial statements. If you are starting a new business, we’ll review projected financial statements as well as data like industry averages.

3. Conditions

When assessing a loan request, we take great care to understand the market and conditions in which you are planning to operate your business. Is the industry mature, or emerging? What are the current political, environmental, social, and technological issues affecting the industry? To gain insight, we look at data from industry associations and government and regulatory bodies, as well as your own marketing plan research. And, of course, we factor in the ability of your business to help drive rural economic diversification – adding recognition for big potential impacts.

4. Capital

Capital includes your personal and corporate net worth, the “sweat” and real equity you have invested in the business and your ability to access other financial reserves. We want to make sure you have adequate capital to grow your business and to weather any unexpected emergencies or setbacks. Having insufficient capital is a common mistake for too many businesses, and we want to ensure it doesn’t happen to you.

5. Collateral

Because Community Futures organizations are developmental lenders, we place a greater focus on the management team, business capacity, market conditions, and cash flow of a business. However, we do have a responsibility to lend money responsibly, and therefore must take adequate security. We will be as creative as we can in assessing your collateral, but we are aiming for a 1:1 security to loan principal ratio.

Your chances of obtaining a loan depend upon how you are assessed in each of these areas. By becoming familiar with these 5 criteria, you can ensure that your business plan addresses all the essential points, and that you are prepared to answer any questions the review board may have. Be ready to show us the creativity, energy and drive behind your business idea – and we’ll do our best to help.

 

Entrepreneurs with Disability Program logo

Entrepreneurs with Disabilities Program

This fund was established in 1997 b y Western Economic Diversification Canada to make it easier for entrepreneurs with disabilities to pursue their business goals.

Please visit the Entrepreneurs with Disabilities website for more information.

The Entrepreneurs with Disabilities website is a resource for people with disabilities who may be exploring the option of self-employment and need access to some basic tools and information on the initial steps for starting a small business.

The site has web accessibility features for people with disabilities and provides straightforward information on self-employment, creating a business plan, and how to apply for an EDP loan.

Regional Relief and Recovery Funding (RRRF)

The Government of Canada and Community Futures organizations (CFs) understand the difficulties the COVID-19 pandemic has caused the small business community throughout the West. As a result, the Government of Canada has made funds available to the CFs to provide support and assistance to SMEs through the rural stream of the Regional Relief and Recovery Fund (RRRF).

Small business owners impacted as a result of the COVID-19 pandemic can apply for loans up to $40,000 through the Regional Relief and Recovery Fund (RRRF).

The Regional Relief and Recovery Fund provides funding to support businesses that have not been approved for supports through the Canada Emergency Business Account (CEBA) or the Emergency Loan Program delivered through Aboriginal Financial Institutions.

General Details of RRRF
  • Maximum loan of $40,000;
  • 0% interest until December 31, 2022;
  • No principal payments until December 31, 2022;
  • Principal repayments can be voluntarily made at any time without penalty;
  • 25% up to a maximum of $10,000 in loan forgiveness is available, provided the outstanding balance is paid back by December 31, 2022;
  • If any part of the balance is not paid by December 31, 2022, the remaining balance will be converted to a term loan effective January 1, 2023; and,
  • The full balance must be repaid no later than December 31, 2025.
Eligible Uses for RRRF Loan Funding
The funds from this loan shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.  Note that funds from this loan cannot be used to pay expenses already supported through the Canada Emergency Wage Subsidy or the Canada Emergency Commercial Rent Assistance.
Businesses Eligible for RRRF Funding
  • As per Terms and Conditions of the Community Futures Program, SMEs are defined as having less than 500 employees and annual sales revenue of less than $20 million, and produce goods and services for the market economy, regardless of their business structure (e.g. sole proprietorships, social enterprises, cooperatives, etc.);
  • The applicant has not been approved for other federal supports such as the Canada Emergency Business Account (CEBA)
  • The SME must have been viable as of March 1, 2020;
  • Established before March 1, 2020; and,
  • Must have been adversely impacted because of the COVID-19 pandemic.

For more information on the Regional Relief and Recovery Fund (RRRF) or to apply, please click on the link below to start the online application process.

Please note: Once you submit your application, you will receive an email notification that is confirmation we have received your application and are working on your request. Rest assured a CF representative will contact you as soon as possible. Thank you for your cooperation and understanding.