Loan Program To Meet Small Business Needs

Small business will now have access to capital through a loan guarantee program initiated by Nova Scotia Economic Development.

The program will be offered through 39 credit unions across the province, Economic Development Minister Cecil Clarke announced today, June 24. The province is providing $6 million in loan guarantees, while the Credit Unions are providing $2 million.

"We know that access to capital is the single biggest issue for small businesses throughout Nova Scotia," said Mr. Clarke, Minister responsible for Industry, Trade and Commerce. "This program fills a long-standing need and ensures that decisions are made in the local community."

"There's no question the small business sector has been under- served," said Peter O'Brien, vice president Atlantic, Canadian Federation of Independent Business. "We have seen larger institutions shift to centralized decision-making and away from the administrative costs associated with smaller loans. This program will invigorate the small business sector."

Loans up to $150,000 will be available to small businesses. The province will guarantee up to 75 per cent of the loan, with the credit unions being responsible for the remaining 25 per cent. The province will also provide $50,000 annually for the three- year pilot to cover operating costs.

Representatives of the Credit Unions and Nova Scotia Economic Development will approve the loan guarantees through regional committees -- ensuring the decision-making stays in the local community. Once approved, the Credit Union would issue the loan and monitor compliance.

"Co-operatives and Credit Unions have been the economic backbone that have built so many Nova Scotian communities," said Bernie O'Neill, senior vice president, Credit Union Central. "Our whole sector, through the Nova Scotia Co-operative Council, is proud to be a part of a program that will continue to build on the success demonstrated by small business operators throughout Nova Scotia."

"This program will also target youth and disabled entrepreneurs in rural communities," said Mr. Clarke. "Just as our growth strategy envisions, we're helping to turn ideas into products."