If you’re young and want to start a business, finding the money you need to turn your vision into reality can be tough. Especially if your dream is to start a retail business. Finding proper funding can be a challenge. Standard banks generally won’t loan money to people with little or no collateral and business grants are also hard to find in Canada. That’s why Futurpreneur Canada is the perfect solution. They are the main source of small business funding in Canada for youth-entrepreneurs between the ages of 18 to 39. Strong supporters of the young generation, they are a non-profit organization that provides money, mentoring and support to aspiring young business owners.
Those who qualify can receive up to $45,000 in small business financing through their organization and their partner, Business Development Bank of Canada (BDC). Aside from funding, one of their best features is their dedication to business mentoring. Successful applicants can receive up to two years of mentoring through their network of entrepreneurs, mentors and business experts from across Canada.
Financing With Mentoring
- General program for 18 to 34-year-olds with financing up to $30,000 and two years of mentoring
- General program for 35 to 39-year-olds with financing up to $45,000 and two years of mentoring
What’s great about this?
Collateral-free loans at “better interest rates than most banks offer”. The actual rate depends on whether you are receiving financing through Futurpreneur Canada or through its partner, BDC.
- If you are 18 to 34 years old and getting a business loan of up to $15,000: borrowing through Futurpreneur Canada. Your loan will have a five-year term with interest charged at CIBC’s prime rate plus 3%. You will make only interest payments the first year.
- If you are 18 to 34 years old and wish to borrow more than $15,000 (max $30,000): borrowing through BDC. You will have to show a minimum investment of 10% of the total value of your project. Your repayment terms will also be different.
- If you are 35 to 39 years old: you can apply for up to $45,000 of funding through BDC.
You have the option to prepay all or a portion of your loan:
Once a year on the anniversary date of the loan authorization date, you can repay 15% of the principal outstanding without indemnity. You’re also able to prepay all or a portion of the outstanding principal. However, you also have to pay the interest owing at the time of repayment, along with an indemnity equal to three months’ interest on the principal prepaid.
Two Years of Mentoring is Included!
The biggest problem young entrepreneurs face isn’t finding financing. It’s having the expertise to execute their business idea successfully. Being a successful entrepreneur involves so many skills and so much knowledge. That’s why having a good mentor is crucial. Those who have the expertise and knowledge since they’ve been doing it for a while can be of great help. Futurpreneur offers a great mentoring program that can go a long way when it comes to managing your business.
What You Need to Apply for Funding
Besides being the right age, you must also be a Canadian citizen or a landed immigrant.
You also need to have a business that is fully operating for less than a year.
Your proposed business needs to create full-time sustainable employment for the applicant and be suitable for government funding.
There’s no need to have a fully developed business plan before you apply for funding. However, you will need to have one by the end of the application process.
You must also:
- Demonstrate some training/experience related to your business idea.
- Work with a mentor for up to two years (4 to 5 hours a month).
- Complete Futurpreneur Canada status updates every three months.
- 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.
Special Funding Programs for Young Entrepreneurs
Futurpreneur Canada also offers several specialized startup funding programs for young entrepreneurs, including those for:
- Newcomers to Canada
- People who are current students
- People starting or currently working in a non-profit organization
The Spin Master Innovation Fund
If your business idea demonstrates innovation, consider applying for this fund.
Each year, ten young Canadian entrepreneurs are given the personalized expert support they need to break into their industry and up to $50,000 in funding. This personalized expert support includes an Innovation Launch Pad Workshop and an Accelerator Workshop (both in Toronto) as well as ongoing mentoring and participating in development opportunities. Once you get through The Spin Competition, you’ll have the opportunity to pitch your business idea to a panel of Spin Master executives and industry leaders.
What Do You Need to Apply?
- Between the ages of 18 to 34
- Canadian citizen or permanent resident
- An innovative idea. One that is going to push the boundaries of what’s possible. You also need to have a viable business plan that demonstrates how it will be profitable and how it’s innovative in its field. Your Business Plan must also include a Two-Year Cash Flow Projections on the Futurpreneur Canada Template The Cash Flow Basics.
- Scanned copies of Drivers’ Licenses of all age-eligible applicants
- Copy of the appropriate business registration documents: Articles of Incorporation and Shareholder Agreement if your business is incorporated. Or Sole Proprietorship or Partnership Registration
*Note that dates will vary by year, so check the website for exact dates:
- Applications Open: May 1
- Application Deadline: June 19
- Shortlisted Applicants Notified: June 29
Another Great Thing About This Competition…
If you apply and are not one of the ten entrepreneurs selected to go through the Spin Competition, or do get that far and no further, you can transfer your application to Futurpreneur’s Financing and Mentoring Program if eligible and still get funding.