Immigrant Small Business Loan Program
Through a partnership with the Nova Scotia Co-operative Council and the Government of Nova Scotia, credit unions are offering a small business loan program that aims to help immigrants who are interested in starting, expanding or buying a small business.
This pilot project, which is available exclusively through credit unions, is a joint initiative of the Nova Scotia Co-operative Council, Atlantic Central, local credit unions, the Department of Economic and Rural Development and the Office of Immigration.
The Immigrant Small Business Loan Program is an extension of the Small Business Financing Program, also administered by the Nova Scotia Co-operative Council through credit unions.
The following are answers to frequently asked questions.
Where is this program available?
The program is available across Nova Scotia, through credit unions only.
How do I apply?
Visit a Credit Union Atlantic branch or call 492-6500.
What will I be required to provide?
We require a business plan that shows the viability of your business idea. You will also be asked to provide information regarding your net worth, credit history, confirmation of assets, and other documents that are normally required when applying for a business 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?
Yes. CUA 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 we feel your business has potential for success, we 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 $500,000.
How much can an immigrant entrepreneur borrow?
Under this program, the maximum amount that can be borrowed is $500,000.
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, 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 you and CUA. The maximum term under this program is seven years.
What is the interest rate?
The interest rate is negotiated between you and CUA, but will not exceed 12 per cent.
Is there a fee to access this program?
You are required to pay a one per cent administration fee annually, based on the total value outstanding on the loan. This one per cent is a guarantee fee that is remitted by CUA 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. CUA 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, we may request that you 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.