The Business Development Bank of Canada provides financing, venture capital, and business development consulting to small and medium-sized businesses. It tailors loan terms to new business models and promotes entrepreneurship through various programs and resources, including an online Advice Center and publications.
Founded in 1944 and owned by the Canadian government, the Business Development Bank of Canada is a banking institution focused on promoting entrepreneurship among small and medium-sized businesses in the country. It does this by providing financing, venture capital, business development consulting, educational materials, and online tools for startups with approximately 50 to 250 employees. The Business Development Bank of Canada is often willing to lend to start-ups by tailoring loan terms to the company’s new business models when its performance and financing needs fall outside acceptable guidelines for traditional commercial lenders. . The bank does not provide retail banking services to everyday consumers.
The bank promotes entrepreneurship through three main programs: BDC Financing, BDC Subordinate Financing, and BDC Venture Capital. BDC Financing provides business loans to eligible businesses that include more flexible terms than loans provided by conventional lenders. Loans are available for everything from startup costs and working capital to market expansion and business succession. The program also offers a special suite of loan services specifically targeted at Aboriginal entrepreneurs.
BDC’s subordinated financing program is aimed at successful existing businesses that require working capital to grow but lack the collateral that a conventional lender may require to secure a loan. Because a loan is unsecured, the debt owed to the bank is considered subordinate, or secondary, to other secured debts the company may have with other lenders. In addition to traditional payment schedules, payment terms may include the company granting bank stock options or paying royalties as the company grows over time.
BDC Venture Capital invests in high-tech companies, thus providing seed capital for start-ups and working capital for expansion. The program invests primarily in businesses that demonstrate high growth potential and are believed to become leaders in the following industries: information and communication technology; Life sciences; or energy, environment, electronics and materials. The bank generally seeks to partner with one or more institutional funds that share its selection criteria and investment philosophy when deciding which companies to underwrite.
In addition to its loan programs, the Business Development Bank of Canada operates an online resource center, the Advice Center, which offers a mix of public and subscriber-only services. Support tools are available to help entrepreneurs start, grow, run, or sell a business. To receive access to subscriber-only tools, users must subscribe to the bank’s monthly electronic newsletter or semi-annual print magazine, both of which are free. “Ask a Pro,” one of the Business Development Bank of Canada’s Advice Center’s public online services, invites users to ask questions of a designated subject matter expert on a specific business topic each month. Questions and answers are posted at the end of the month for users to review.
As mentioned, the bank publishes print and electronic materials. Business Development Bank of Canada publications include: eProfi $ monthly newsletter and Profit $ bi-annual print magazine, both of which feature stories focusing on successful startups and best business practices; the Monthly Economic Bulletin, an electronic publication that provides information on current economic conditions and their impact on the small business sector; and the Aboriginal Newsletter, aimed at the first nations of the bank, that is, the audience of the Inuit or metis. The bank also hosts events such as Small Business Week held each October that focuses on training, development, and networking opportunities for small business entrepreneurs.
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