The Business Development Bank of Canada (BDC) announced on Thursday a $280-million financing package to support businesses in the Atlantic provinces over the next two years.
A news release states the announcement is in support of the Atlantic Growth Strategy in an effort to help sustain economic development in Atlantic Canada.
Targeted industries include information and communication technology, agrifood, ocean technology and tourism.
Michael Denham, president and CEO of the BDC, said the amount represents a $100-million increase in the bank’s normal lending volume for these industries.
“These sectors were discussed as priority sectors for the region because they build on some strong talent in the area, they lend themselves to export and growth, and growing these sectors will lead to a better diversification of the economies in the Atlantic provinces,” Denham said.
“We recognize that entrepreneurs and small businesses in the Atlantic provinces need access to more financing to fund their projects and growth.
“The BDC is the only financial institution in Canada that focuses exclusively on entrepreneurs.
“In the Atlantic provinces now we have a loan portfolio of about $2 billion, and (in Newfoundland) we have a presence in St. John’s, Grand Falls-Windsor and Corner Brook.”
Bill Barry, head of Barry Group Inc. in Corner Brook, said the BDC has been an exceptional financial vehicle to help his company grow over the years. He said the BDC is showing “enormous” confidence in Atlantic-Canadian businesses.
“It’s a pretty bold initiative at a time when, in many areas of Atlantic Canada, the economy is at a downturn,” Barry said. “But I think it is a great initiative for the time because for people who want to grow their business or expand, whether it’s on the technology side or on the resource-based side, that type of announcement really encourages people to give things a second thought that they may be considering doing, knowing that type of money — as long as you qualify — is available.
“BDC has a special culture and mandate to provide that type of support throughout the Canadian economy and we’ve been dealing with them for 30 years or so now.”
According to its website, bdc.ca, the BDC is a financially sustainable Crown corporation that operates at arm’s length from the Government of Canada. The BDC provides businesses in all industries with financing and advisory services.
Denham said surveys have indicated that in the Atlantic provinces 82 per cent of entrepreneurs intend to invest in their business in 2017, and 82 per cent also anticipate revenue growth in 2017 —higher than the national average.
“What we do is we sit down with the entrepreneurs, we go through their plans, we make sure we understand them, we provide some support and, depending on their need, we can lend them money or we can bring to bear our consultants and their advisory expertise to help them achieve their growth, diversification and export plans,” Denham said.
“We work with them around putting in place the kind of sales force, the relationships, the connections to help them tap into non-local, non-Canadian markets.”
Denham said about 15 per cent of the BDC’s portfolio of clients in Atlantic Canada are companies involved in the fishery or a related sector. In Newfoundland and Labrador, the BDC has nearly 300 clients involved in the fishing industry.
Barry said the first thing any entrepreneur must have is a well-thought out and researched idea. He said without that, many businesses that start up eventually fail.
“Some of that really good, sound research they can do by talking to an appropriate financial institution like BDC, because people within an organization like BDC have got a tremendous amount of experience connected to the economy generally. They can help people stay away, especially startups, from beginning pitfalls,” Barry said.
“You need a financial institution that understands your dream and wants to help you achieve it, but that also will give you a critical analysis of your dream.
“If you can identify a need and you can identify a competitive way to service that need, that type of thinking is the way you go to a lender and convince a lender that you need so much money to invest in this.”
Barry said, in his opinion, the BDC is in tune with the needs of entrepreneurs and is aware of the financing stability that entrepreneurs need to invest and build a business over the long term.
He said the fish companies in Atlantic Canada that are successful over time are the ones with a great entrepreneurial spirit.
“There is always a fair amount of change going on in the fishery, and change is the one constant in the fishery. Companies will either be the victims of change or the beneficiaries of it,” he said.
“You need to have enough diversity in your business to be able to ride those cyclical ups and downs and take advantage of the things that are up. That type of thinking and the type of investment that supports that is certainly a very easy conversation to have with the people in BDC.”
