Officials with the Nuu-chah-nulth Economic Development Corporation (NEDC) can now start assisting some businesses with grand and costly plans.
Established in 1984, the NEDC is an Aboriginal Financial Institution (AFI) which has been providing loans to small- and medium-sized Indigenous businesses throughout Vancouver Island.
Earlier this month it was announced that $10 million had been advanced to the NEDC through the Indigenous Growth Fund (IGF), a new initiative created and managed by the National Aboriginal Capital Corporations Association (NACCA).
NEDC’s general manager Al Little said the new funding announcement came at just the right time.
“Our cash flow was exhausted when the additional $10 million became available,” he said.
Little said the NEDC typically hands out between 200-300 loans each year.
“We’re usually doing about $12 million a year in financing,” Little said, adding those loans were all considered small to medium in nature.
But now, thanks to the IGF, Little added the NEDC will be able to provide considerably larger loans, in the neighbourhood of $500,000 up to about $2 million.
“It adds to our cash flow and it will allow us to meet the demands of our customers,” he said.
And yes, Little said there are various businesses on Vancouver Island, including Nuu-chah-nulth ones, who are seeking their share of hefty amounts when it comes to financial assistance.
“There has been a growth for the demand in financing and in the amounts for the loans,” he said.
Little anticipates it won’t be long before the $10 million funding it received from NACCA is accounted for.
“I would say it would be utilized this calendar year,” he said.
Indigenous entrepreneurs from across the country will be able to apply for loans through the IGF via the network of AFIs set up throughout Canada.
The initial investors of the fund are the Government of Canada, Business Development Bank of Canada, Export Development Canada and Farm Credit Canada.
“Indigenous businesses are hungry for capital,” said Jean Vincent, the chair of the board for the IGF. “And so many of our business owners have great potential. That’s why our network pressed for creation of the IGF.”
The IGF is considered to be a major step forward in economic reconciliation. That’s because it will provide funding to some Indigenous businesses that in the past faced numerous barriers and obstacles while trying to obtain loans through traditional banking systems.
It should be noted that Indigenous entrepreneurs will not be able to apply for funding directly through the IGF. They must complete an application process through an AFI.
The HFN Group of Businesses, which is the business arm of the Huu-ay-aht First Nations, has long been using the NEDC as its financial lender.
And the group is among the first beneficiaries of the IGF. The NEDC provided a $1.5 million loan to the HFN Group of Businesses, more specifically the Huu-ay-aht Fisheries Ltd.
This funding will allow Huu-ay-aht to be part of a joint oyster seeding project with Mari Culture LP, based in Bamfield.
Patrick Schmidt, the CEO of the HFN Group of Businesses, said the joint project is well underway.
“We presently have about a million oysters in the water,” Schmidt said. “Next year we want three million. And the following year we plan to get up to 10 million.”
The new business is planning to produce seafood as efficiently as possible and then export it throughout the world.
Schmidt is uncertain if his First Nation would have been able to become a partner in the oyster seeding project if it were not for the NEDC and its available funding.
“It would be really tough to get a conventional lender to engage,” Schmidt said. “In the case of NEDC, I was able to take the loan officer down to the farm and spend a day walking through each step of the production process and business model.”
Little, a member of Ahousaht First Nation, said the $10 million it received through the IGF will primarily be geared to offering larger loans than NEDC has been accustomed to in the past.
“We’ll still be doing smaller loans,” he said. “Indirectly it will allow us to do all size loans.”
Besides the HFN Group of Businesses, the NEDC has already been able to assist others with loans from money it received through the IGF.
For example, a loan was provided to the two sisters who run Ay Lelum, a fashion design business on Snuneymuxw First Nation. With their loan the sisters are building a facility to operate their business instead of running it from their homes.
Meanwhile, the owners of Bigfoot Donuts in Courtenay have received a loan as they are looking to purchase a bigger facility to operate their successful business.