One of the biggest challenges small business owners face is access to capital. Banks are a popular place to get financial assistance, but did you know there are options specifically for Aboriginal communities as well?
First Nations Bank of Canada is a chartered bank that’s over 80% Aboriginal-owned. It focuses on providing progressive and relationship-based financial services to Aboriginal people, including small business owners. First Nations Bank has several locations around Canada, with three on reserve.
Aboriginals who are members of a First Nation and are living on a reserve in Canada generally don’t own their homes, and the reserve land where the homes are located is governed by the Indian Act, which prohibits the use of the land as collateral for loans.
The Government of Canada, in attempting to meet the obligations under treaties signed with First Nations, provides economic development funding in different forms which may be accessed by reserve members to overcome the possible lack of capital and collateral.
The Government of Canada, through Aboriginal Affairs and Northern Development Canada (AANDC), offers annual economic development funding for each First Nations community, for use in promoting local economic development initiatives, including business and labour force development.
These initiatives may include offering loans or grant funding to a member to help in developing a or expanding a business. At the community level, there may also be an Economic Development Officer to help members with the development of business plans. This may be the first place a reserve member would turn to access guidance and/or additional capital.
The Government of Canada has also provided funding to create local and regional economic development agencies, referred to as Community Futures Development Corporations and National Aboriginal Capital Corporations Association. The objectives of these agencies are to provide entrepreneurial services and access to capital through business development loans, assist with business development/expansion plans and give referrals to other sources of financing.
AANDC has also developed the Aboriginal Business Canada program that, according to its website, “maximizes Aboriginal people’s participation in the economy through business development. We do this by working with aboriginal entrepreneurs and businesses [providing] support to Aboriginal entrepreneurs for a range of activities including business planning, start-up, expansion and marketing.”