Startup Funding for Young Entrepreneurs in Canada

Aug 21, 2023

 

 

If you’re a young individual aiming to kickstart a business, obtaining the necessary funds to turn your vision into reality can be challenging. Traditional commercial banks typically aren’t interested in providing loans to those without much collateral, business grants are scarce in Canada, and crowdfunding may not be a viable solution for everyone.

 

Nevertheless, if you’re between the ages of 18 and 39 and looking to establish a business in Canada, there’s a fantastic funding resource available to you. Futurpreneur Canada, the primary provider of youth-focused small business funding in the country, is a nonprofit organization dedicated to offering financial assistance, mentoring, and support to aspiring business owners aged 18 to 39.

Qualifying young entrepreneurs can receive up to $60,000 in small business financing through Futurpreneur Canada and its partner, the Business Development Bank of Canada (BDC). However, what truly sets this organization apart is its strong commitment to mentoring. Successful applicants can benefit from up to two years of guidance provided by Futurpreneur’s extensive network of entrepreneurs, mentors, and business experts from all across Canada.

 

Look first to Futurpreneur Canada

The general program offered by Futurpreneur is designed for individuals aged 18 to 39 who have the desire to establish their own business. It provides financing options of up to $60,000 along with two years of guidance and support. These loans are provided without requiring collateral and come with favorable interest rates. Additionally, as you embark on your business journey, you will have the advantage of receiving mentoring.

If you receive the full amount of $60,000, it comprises $20,000 from Futurpreneur Canada and $40,000 from the BDC. It is important to note that each source has its own distinct interest rates, fees, and terms, which can be found on Futurpreneur’s website. Make sure to acquaint yourself with this information.

Should you wish to repay a portion or the entire loan in advance, you have the flexibility to do so. There are no penalties for repaying through Futurpreneur. You are allowed to pay back up to 15% of the outstanding principal on your BDC loan annually. Although the BDC permits you to make additional prepayments, you will be required to cover the interest due at the time of repayment, along with an indemnity equivalent to three months’ interest on the principal amount prepayments.

 

Financing With Mentoring

Young entrepreneurs often struggle with a different challenge, which is not the lack of financial resources, but rather the lack of expertise required to effectively implement their business idea. Succeeding as an entrepreneur encompasses various skills and extensive knowledge, and rarely do individuals possess all these qualities at once.

Furthermore, many of us don’t initially have a well-established network of experienced professionals who have already achieved success in our chosen industry. These individuals, who have gained valuable experience and can offer valuable advice and motivation, are the ones who have “been there and done that.” Having a reliable mentor significantly increases the chances of success for a new business. In fact, the benefits are so significant that participating in Futurpreneur’s mentoring program is worthwhile, even if you don’t require any financial support.

 

Requirements for Funding Application

In addition to meeting the appropriate age requirement, you must also be a Canadian citizen or a landed immigrant. Moreover, your business should have been fully operational for less than a year.

Your proposed enterprise must generate full-time, stable employment opportunities for both yourself and any other potential applicants. Additionally, it should be eligible for government funding, meaning it cannot involve sexual exploitation or illegal activities. While a complete business plan is not required at the time of application, it will be necessary to have one ready by the conclusion of the application process.

Furthermore, it is essential that you also:

 

  • Demonstrate some training/experience related to your business idea
  • Agree to work with a mentor for up to two years (four to five hours a month)
  • Agree to complete Futurpreneur Canada status updates every month
  • Agree to provide authorization for Futurpreneur Canada to carry out a credit check
  • Supply two personal references
  • Assure that the business is NOT in the research and development stage
  • Assure that financing proceeds may not be used for refinancing existing debt.
  • Demonstrate that you have 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.

You can apply for the program at any time of year.

Special Funding Programs for Young Entrepreneurs in Canada

Futurpreneur Canada also offers several specialized startup funding programs for young entrepreneurs, including those for:

 

CBES is here to assist you; feel free to contact us for expert guidance.

 

 

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