For Black entrepreneur Andrews Baah, being approved for the Black Entrepreneurship Loan Fund is a lifeline that allows his business to “spring forward and be successful.”
“This loan means a lot,” says Baah, CEO Of Apollo Staffing Solutions Inc. in Portage la Prairie in Manitoba. “We’re giving employment to numerous nurses and health care aids. And in this pandemic, there’s a need for health care professionals.”
Baah applied for this loan through the Federation of African Canadian Economics (FACE), a national coalition of Black-led service organizations. FACE administers the $160 million Black Entrepreneurship Loan Fund (a component of the Canadian government's Black Entrepreneurship Program) in partnership with several financial institutions. From May to November 2021, FACE approved $8.5 million in loans through the fund to Black businesses across Canada.
“Black Canadian business owners and entrepreneurs face systemic barriers in starting and growing their businesses, which COVID-19 has greatly exacerbated,” says Tiffany Callendar, FACE CEO. “Access to capital and resources helps Black-owned businesses succeed and contribute to Canada’s post-pandemic recovery.”
A recent study from the Black Business and Professional Association (BBPA), one of FACE’s founding members, revealed that COVID-19 has impacted their members harder than members of the Canadian Federation of Independent Business (CFIB).
“Just 10% of Black-owned businesses were fully open during the height of the pandemic, compared to 20% of CFIB member businesses,” said BBPA CEO Nadine Spencer. “At least 80% of BBPA member businesses reported that they did not have cash flow compared to 30% of CFIB members.”
Baah says his plan for the future is to “expand, expand, expand.” In addition to hiring more employees, he’s getting more contracts and diversifying to other sectors. In two years, he hopes to take his temporary staffing company international.
For Kemba Williams, co-founder of Brampton’s Kean Real Estate Group, a Black and female-owned company, obtaining a Black Entrepreneurship Loan allows her and her partner, Andrea Williams, to grow and offer educational programs that support and encourage black people to build wealth and become homeowners.
“We’re a family run business founded by two black women in a space that’s predominantly non-black,” says Williams. “We’ve been financing our dream independently and now this loan gives us the support we need to continue to thrive as a company and help the black community.”
In Williams’ experience the coalition provides so much more than financial backing. “The FACE ecosystem has connected us with critical training and resources to help us develop as a company and improve our service offerings. It’s linked us with experts in the business community through forums, information sessions, workshops and mentorship.”
Callender explained that a growing number of Canadian corporations have partnered with FACE “to empower Black entrepreneurs by providing support, including access to funding, mentorship, financial planning and business training.”
Over the last couple of months, the Canadian accounting, consulting and tax firm MNP, Deloitte Canada and HubSpot are collaborating with FACE. MNP provides complimentary business support and training services to Black businesses who have access to the loan fund. FACE and Deloitte run a three-week Masterclass Series where Deloitte professionals share their knowledge and experience. HubSpot is a FACE consultant and mentor.
”These partnerships allow us to offer more than just loans,” says Callender. “While access to capital is important, having access to resources, knowledge, and expertise amplifies the impact of the capital.”
“Making a positive difference in our communities means giving not just financial resources but also our time, expertise and experience,” says Jason Tuffs, MNP CEO. “That’s what authentic investment looks like and is why we believed that we could bring something truly valuable to the table. The work FACE is doing is focused on supporting Black Canadian communities across the entire country and we are proud to collaborate with FACE and contribute to their success.”
Like Baah and Williams, obtaining a Black Entrepreneurship Loan allowed Patrick Jean-Baptiste to evolve and expand his Montreal cybersecurity business, Sunphinx.
“I now have a physical space to serve customers and cutting-edge technology,” he says. “I’m helping revive the Canadian economy by creating new jobs, particularly in IT and cybersecurity. With the labour shortage and low representation of Black people in IT, this gives exposure to the next generation.”
Jean-Baptiste says what he’s doing encourages his family and friends to consider running a business is a viable career option. “It inspires them to attempt the great adventure of entrepreneurship.”
In addition to adjudicating the loan fund, FACE also supports applicants through the loan approval process. Callender notes that 93% of Black entrepreneurs needed assistance and supporting documents to complete their application.
“Proper due diligence is vital,” she says. “The loan approval process takes time, but it is important to ensure the longevity of this historical fund. It’s time well spent to make sure we get it right.”
Williams agrees: “For us, the loan process was good because we were prepared and already had some of the requirements like our business plan, financial statements and up to date taxes. There were definitely many times we needed to go back to find supporting documents and information to get the whole application completed, but that’s part of proving who we are, how we’re going to make use of the funds.”
After securing his first electrical and aerospace procurement contract early in 2021, Tayo Shonibare wasn’t sure he could fulfill it due to the initial capital required.
“I considered closing my business before it even started,” says the electrical engineer who operates Shonibare Enterprises in Calgary, Alberta. “I asked family and friends to lend me money but what I needed was more than what an individual could contribute. Getting this loan reduced the financial burden I placed on family members who agreed to loan me money.”
Shonibare is currently completing his first contract and securing his next client. His goal is to be a leader in the Canadian electrical and aerospace industry.
Black entrepreneurs can apply for loans via facecoalition.com. Applicants will need to provide recent financial statements, a business plan and proof of business registration.