Immigrant Small Business Loan Program
PROGRAM DETAILS
Co-operatives and credit unions have a long history of commitment to their local communities. The immigrant Small Business Financing Program is part of this commitment - helping to establish new businesses, grow existing businesses and empower entrepreneurs with the support they need to create employment for themselves and others. That's our interest, that's our commitment.
A credit union is a financial co-operative. Co-operatives and credit unions are businesses owned by their members - the people who use their services. Each member is a shareholder and has a democratic voice through the local Board of Directors. Co-operative businesses have been a significant part of the Nova Scotia economy since 1861.
Who can apply for an immigrant small business loan?
This program targets recent immigrants, so those that have lived in Nova Scotia no more than five (5) years, who cannot access other small business loans and wish to start a small business, acquire an existing business and/or grow an existing business. Eligible immigrants include permanent residents, Canadian citizens born outside Canada and Protected Persons as defined in Section 95 of the Immigration and Refugee Protection Act. Exceptions may be made to Canadian citizens, who have lived abroad and returned to Canada and find themselves with credit history challenges. Any immigrant who is a permanent resident of Nova Scotia, and has lived in Nova Scotia for less than five years, who wishes to start a small business, acquire an existing business and/or grow an existing business.
Where is this program available?
The program will be available across Nova Scotia, through credit unions only.
How do I apply?
Visit the local credit union in your area. To find the credit union nearest you, visit www.nscreditunions.ca
What will the credit union require?
A credit union will require a business plan that shows the viability of the business idea. A client will also be asked to provide information regarding their net worth, credit history, confirmation of assets, and other documents that are normally required when applying for a loan.
Does my past credit history count?
Credit history is an important piece of your identity. All financial institutions will check your credit history when you apply for credit of any kind. A credit history report however, is not the only criteria used by a credit union to make a lending decision. Those with credit history issues are still eligible to apply under the Small Business Financing for Immigrant Entrepreneurs program.
Will I need to give personal security or guarantees to the credit union?
Yes. The credit union will evaluate your loan request by following regular credit lending criteria. This will include an assessment of your personal net worth. If your application does not fit normal lending criteria, but the credit union feels your business has potential for success, the credit union can apply for a loan guarantee to offset their risk. The maximum amount of the loan guarantee will be 90% per cent of the value of the loan, up to a maximum of $150,000.
How much can an immigrant entrepreneur borrow?
Under this program, the maximum amount that can be borrowed is $150,000.
What kind of financing does this program cover?
The program can cover loans that are of a traditional debt nature, for working capital or lines of credit.
Are there any restrictions on the type of business eligible?
All types of business are eligible except residential and commercial real estate, beverage rooms and taverns. Also, any venture of a questionable ethical or legal nature, or businesses deemed to be not in the best interest of the Province, will be ineligible. Each application is evaluated on a case by case basis, and based on the business plan and viability.
What are the terms of a loan?
The terms and conditions of the loan will be negotiated between the client and the credit union. The maximum term under this program is seven (7) years.
What is the interest rate?
The interest rate is negotiated between the client and the credit union but will not exceed 12%.
Is there a fee to access this program?
Clients are required to pay a one (1) per cent administration fee annually, based on the total value outstanding on the loan. This one (1) per cent is a guarantee fee that is remitted by the credit union to the provincial Department of Finance.
Are personal loans eligible?
No. The program only applies to business ventures.
Are there any other requirements under this program?
Access to capital is only one element necessary for business success. Management skills and financial literacy, in addition to a solid business plan are also important. The credit union will assess the strength and validity of the business case being presented, as well as the management strengths and financial literacy of the proponent. If weaknesses are identified, for example, a lack of management expertise, the credit union may request that a client have a business mentor as a condition of the loan, and/or request other training such as management, basic financial literacy etc, before a loan is disbursed.
Is there any support available if I need help with putting my business plan and application together?
The Nova Scotia Co-operative Council, can assist you with accessing the technical assistance you require to strengthen your plan. You will be referred to other partner agencies who already provide these services.
When will the program be available?
Credit unions will be accepting applications from Immigrant Entrepreneurs in mid- January 2009.
If you have specific questions, which are not answered here, please call 902-896-7291 or visit the Credit Union website at www.nscreditunions.ca (read full press release here) | 
