Community Business Development Corporations, also known as CBDCs, are non-profit organizations that offer a variety of programs and services to help you start, expand or modernize a business. We offer valuable business counselling, training and advisory services. Anyone looking to start or purchase a new or existing business can apply for a loan - to a maximum of $150,000.
CBDCs serve rural and semi-urban Atlantic Canada.*
Some common Questions and Answers:
Why do CBDCs exist?
Over 30 years ago, we were created to help people find meaningful self-employment opportunities during times of recession and downturn in the economy. The belief was that local people are best suited to make decisions for local businesses. Over the years, CBDCs have evolved. CBDCs have enhanced programs and services, increasing our supports to small- and medium-sized businesses. We continue to operate with support from the Federal Government through the national Community Futures program. This program is managed by the Atlantic Canada Opportunities Agency in Atlantic Canada (Enterprise Cape Breton Corporation in Cape Breton).
How are CBDCs different from banks?
While banks and credit unions are important and have a key role to play in business development, CBDCs operate quite differently.
- CBDCs have the ability to spend more time providing advice and assistance to entrepreneurs.
- CBDCs have a mandate to help businesses start, grow, and remain competitive in today's marketplace. Although our loan interest rates are priced competitively, we do not compete with banks and credit unions.
- When people apply for a business loan, we place much emphasis on the character of the applicant, and the merit of the business. (More information below.)
- CBDCs are also more flexible during the repayment process, particularly with seasonal options. CBDCs allow you to make lump sum payments or to pay your loan off at any point through the terms of the loan without penalty.
Do CBDCs give grants?
Grants to businesses are not common today. Although some CBDC programs provide training related grants for business skills development (usually cost-shared with the applicant), these incentives are usually tied to loan programs. CBDCs offer business loans and/or equity to businesses, and all loans are repayable.
Where is my local CBDC?
There are 41 CBDCs in Atlantic Canada. By calling our toll free number 1-888-303-2232, you will automatically be connected with your closest CBDC office. Our main website is located at www.cbdc.ca, and you can click here to access the Locate a CBDC tool.
What industries or types of businesses do CBDCs assist?
CBDCs work with every industry, including fishing and forestry, although some CBDCs may have local policies that pertain to their own region. It should be noted that CBDCs traditionally do not assist with real estate development or debt-consolidation.
How are loan decisions made? What is the process?
All CBDCs are governed by a volunteer Board of Directors - people from your community. These volunteers meet monthly, or as established by the local CBDC, to review and vote on whether an application is viable and makes a net economic impact on the community.
The application process can also differ depending on the CBDC, but is usually very streamlined and efficient. You will need to meet with a CBDC Business Development Officer, discuss your business and provide a business plan and other support documents. All CBDCs require clients to complete the appropriate application documents. (Other materials and clarification may be required depending on the nature and scope of your project.) Typically, the entire process should take no more than 2 to 4 weeks, once all documentation for the application is in place.
Will the CBDC write my business plan?
A CBDC will not write your business plan for you, but they will help you learn how to develop one, and provide the appropriate tools and resources.
Is my credit history important?
While credit is not critically important to the process, having good credit does help to strengthen your application. All applicants are subject to a credit review, and the outcome can affect your likelihood of success for your application. It should be noted that bankruptcies, judgements, collection items, and monies owing to Revenue Canada can also have an impact on your chances of success.
Will the CBDC require security on my loan?
This will again depend on your individual circumstance, as well as the program you are utilizing. Some CBDC programs do not permit the taking of security, other than a signed promissory note. When accessing core CBDC loans, however, the security required depends on the loan amount requested. It may include a promissory note(s), personal guarantee(s), general security agreement(s), and/or mortgage(s). Additional security options may also be considered based on individual CBDCs.
What are the terms and amortization for a loan?
Terms and amortization will depend on the loan you are accessing. (CBDCs administer core CBDC business loans, but we also deliver a variety of other start-up loans). With respect to a core loan, the interest rate can vary, depending on CBDC, but typically start at prime + 2.00%. It should be noted that the repayment term is based on a variety of factors, and should be discussed with your local CBDC.
What is the cost of application/borrowing?
While some CBDCs charge an application fee, others may choose to charge an administration fee, one that usually reflects a percentage of the amount borrowed. In all instances, the cost is reasonable, and is often the only fee you will pay to a CBDC.
Although the internet is a great source of information about CBDCs, it is best that you contact your local CBDC and talk with a business development officer in person. To locate your closest CBDC, click here.
*We do not serve metro Halifax, Dartmouth, Bedford, Charlottetown, Fredericton, Moncton, Saint John and St. Johnís but some of our programs are delivered by partners in these area.