With a $2 trillion succession tsunami on the horizon in Canada, Indigenous entrepreneurs are getting their chance to take the reins of mom-and-pop shops across the country.
What happened: The First Nations Bank of Canada (FNBC) and Business Development Bank of Canada (BDC) are launching a $100 million initiative to help Indigenous communities buy established small businesses in Canada.
How it works: Indigenous groups will be able to apply for a loan through FNBC to buy small businesses like home maintenance companies, small manufacturing firms, and food-service franchises. FNBC expects the loans to be around $5 million each.
- The buyers will contribute some of their own capital, FNBC will lend them the rest of the cash, and BDC will guarantee up to 85% of that loan in the event of a default.
Why it matters: Over 75% of small business owners in Canada plan to retire in the next decade, but fewer than 10% of them have a formal succession plan. Matching those soon-to-be-retirees with Indigenous entrepreneurs — a group that’s growing twice as fast as the national average — could be a win-win.
Big picture: Economic reconciliation in Canada has largely focused on community stakes in infrastructure projects, like pipelines, where the benefits are longer-term and less direct. For individuals, this project has the potential to open real financial doors immediately.—LA