Feds fund $55M loan pool for female entrepreneurs
‘This is a game-changer’
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Hey there, time traveller!
This article was published 15/08/2022 (288 days ago), so information in it may no longer be current.
Women entrepreneurs across the country now have another $55 million of capital to draw from in the form of loans of up to $50,000, thanks to a new federally-funded loan pool.
Mary Ng, the federal Minister of International Trade, Export Promotion, Small Business and Economic Development announced the new program in Winnipeg on Monday.
About $30 million of it will be administered by the national Women’s Enterprise Organization of Canada (WEOC), which is based in Winnipeg.
Ng said the fund’s creation was the result of plenty of evidence that women business owners represent a segment of the economy that has faced plenty of barriers to accessing capital for years.
“It is like only fielding half a team and leaving the other half on the bench,” Ng said at the announcement at The Forks on Monday.
The news was greeted enthusiastically by members of the women entrepreneurship ecosystem in Canada.
Marcela Mandeville, chair of the board of WEOC, who is also CEO of Alberta Women Entrepreneurs, said, “This is a game-changer.”
Joelle Foster, CEO of North Forge Technology Exchange and an ardent advocate for women in tech, said, “This will be a welcomed option to help women who can’t normally go through the traditional funding route.”
Ng said research showed that there would be greater impact for the federal government to support women business owners by making smaller loans more accessible to more women. Other lending programs including from Business Development Bank of Canada, offer larger amounts. But Ng said that studies show that women-owned businesses that are funded earlier have more chance of success in scaling into larger businesses.
Maxine Kashton, CEO of Women’s Enterprise Centre of Manitoba, said her organization – which has run a lending program for many years – said she was in the process of setting up a micro-lending program but now that this new fund is available she said she’s happy to partner with WEOC.
The terms and conditions on how the loans will be managed is still to be determined, but Kashton said there will likely be the opportunity to disburse loans – at higher interest rates – without collateral.
Ng said that the decision to make this $55 million investment — $25 million will be administered by other partners not part of WEOC – was not too hard to justify.
She said the current government launched its Women Entrepreneurship Strategy in 2018 with a $6 billion investment and it has already produced a $150 billion return.
“This is the best investment we can make,” she said. “As trade minister, talking to my colleagues around the world I tell them we should all be doing this together. If the world followed suit by empowering women in our economies, it would be a $12 trillion proposition. Why the heck would we not make that kind of investment?”
In Canada only 16 per cent of businesses are owned or run by women. Ng said studies have shown that when men make a pitch to access a loan, they are successful 65 per cent of the time, but when women make the same pitch – word for word – they are only approved 37 per cent of the time.
“That barrier is very real,” she said.
Studies have also shown that women entrepreneurs are less likely to seek financing and are more likely to operate smaller businesses, but that characterization is changing. There are gender-specific venture capital players and more women in finance willing to favor women clients.
There are no details yet as to how the funds will be dispersed across the country. Kashton said it may not be pro-rated because, for instance, some provincial women’s enterprise centres like Newfoundland and Labrador’s have never had a loan fund.
“We already have some funds so we will not use WEOC funds unnecessarily,” she said.
Meanwhile, she said, regardless of the uncertain economic times and rising interest rates, there are still many women entrepreneurs out there looking to grow their businesses.
“Entrepreneurs are really a special brand of people, they are really always looking to grow their businesses,” she said. “Even though women are less likely than men to take on debt, women are not afraid to even these days with higher interest rates.”
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Tuesday, August 16, 2022 9:37 AM CDT: Corrects typo