Community Futures Development Corporations get $100K boost

More FedNor dollars injected into the region’s investment pool is great news, but other partners still need to step up and help businesses get the financing they need, says this area’s Chamber of Commerce president.

Industry Minister Tony Clement, who is also the minister responsible for FedNor, made a brief appearance in the city during a Wednesday morning news conference at Thunder Bay Hydraulics. During the news conference Minister Clement announced the federal government was adding $1.1 million to the Community Futures Program’s annual budget.

The program is a national initiative that allows 259 regional Community Futures Development Corporations to offer repayable loans to small- and medium-sized businesses.

The announcement included a $100,000 FedNor investment for the Northwestern Ontario investment pool, which is a partnership involving eight development corporations from this region. Thunder Bay Ventures is a CFDC included in that investment pool.

“I think the announcement is excellent,” said Thunder Bay Chamber of Commerce president Harold Wilson. “We have a lot of company’s scrambling for financing. Now we need more funding from the (Northern Development and Heritage Fund) and the banks.”

Wilson said credit has been tight for a while. Even though lenders are starting to loosen up, he said lending partnerships are vital in order to get small- and medium-sized businesses the investments they need.

“So any initiative that will seed more dollars into (business) to provide more partners coming to the table, that spreads the risk along and that’s what we need,” he said. “So today it’s a great announcement, but now we want to see a few other folks step up.”

Thunder Bay Ventures is a Community Futures Development Corporation and is part of the Northwestern Ontario investment pool. A portion of the $100,000 announced by Minister Clement will go to Thunder Bay Ventures with the rest being shared by seven other area CFDCs.

Thunder Bay Ventures has made more than 500 loans in the more than 20 years the organization has operated. Right now Thunder Bay Ventures has about 70 active loans.

The money CFDCs provide to businesses shouldn’t be confused with bailouts, Clement said to media following the news conference.

“This is not a rescue fund,” the minister said. “Sometimes what happens is a business has a chartered bank it may have a relationship with, and that bank is good for 70 per cent of a loan. But the bank doesn’t want to take a risk on 100 per cent of the loan.”

A CFDC may work with that business, its bank and other government agencies help get the full amount of the loan secured.

The federal government doesn’t make the decision as to what businesses benefit from funds given to the CFDC. While there is an auditing process, Clement said the individual CFDC make independent decisions about how the loan money is used.