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Business loans, grants and other funding for racialized persons in Canada

Business owners from racialized groups in Canada can face significant hurdles. Here are funding options to help.

Whether you’re a new business owner or a seasoned entrepreneur, building a business requires hard work. Thankfully, there are big payoffs — and not just for you, but for the overall economy. According to the Department of Innovation, Science and Economic Development in 2019, small businesses employed more than two-thirds (68.8%) of the Canadian workforce and contributed more than a third to the country’s gross domestic product (the total market value of all goods and services produced by Canadians).

Many smaller companies are owned and operated by racialized persons. Despite making a significant contribution to their communities, these racialized business owners face unique, and sometimes pervasive, barriers that prevent them from achieving their full potential.

To help, many governmental departments, associations and organizations have stepped in to lend a hand — and some money. Whether you’re a black entrepreneur or a business owner that identifies as a racialized person, here are the grants and business loan programs available to you.

Business loans for black entrepreneurs and racialized persons

There are many business loans available to entrepreneurs in Canada and any business owner operating in Canada can apply for these loans. To help deconstruct some of the barriers facing visible minorities, there are also a few funding programs specifically for racialized groups in Canada. Here are the top three to consider:

Black Entrepreneurship Program (BEP)

The Black Entrepreneurship Program (BEP) is a partnership between the Government of Canada, Black-led business organizations, and financial institutions totalling up to $265 million worth of investment over four years. The BEP also includes a Black Entrepreneurship Knowledge Hub to help identify barriers to success and opportunities for growth.

Through the Black Entrepreneurship Loan Fund, a component of the BEP, black entrepreneurs and business owners can apply for loans of up to $250,000 through the Federation of African Canadian Economics (FACE).

To apply for the Black Entrepreneurship Loan Fund, you’ll need to supply a business plan, up-to-date financial statements, financial projections for two to three years, up-to-date income tax returns (T1 and T2) with notice of assessments and a Personal Statement of Affairs.

Check out more about the Black Entrepreneurship Program here.

Canada Small Business Financing Program (CSBFP) Loan

The Canada Small Business Financing Program (CSBFP) offers loans up to $1.15 million for startups and small businesses that gross $10 million, or less, per year. You can apply for this loan through most major banks including TD Canada Trust, CIBC, Scotiabank and BMO. The amount you qualify for ultimately depends on how the bank evaluates your loan application and credit score. Learn more about the CSBFP loan.

Aboriginal Entrepreneurship Program: Access to Capital

The Aboriginal Entrepreneurship Program is designed to offer Indigenous entrepreneurs and business owners in Canada access to business opportunities and up to $99,999 in funding. The program is managed through the National Aboriginal Capital Corporations Association (NACCA). Funds are distributed through a network of 59 Aboriginal Financial Institutions (AFIs) across Canada. Learn more about how the program works here.

Business loans for young entrepreneurs

Futurpreneur Canada

Canadian citizens or permanent residents between the ages of 18 and 39 could qualify for a loan of up to $20,000 from Futurpreneur Canada, a non-profit organization dedicated to helping young entrepreneurs grow their businesses. If you need additional funding, Futurpreneur Canada has partnered with BDC so you can apply for an additional $40,000 of funding.

Non-governmental loans for racialized business owners

Virtually all business owners in Canada can also apply for loans through banks, credit unions and private lenders. However, there are some financial institutions with specific lending programs geared towards black entrepreneurs, young adults, women-led companies and businesses owned by racialized persons.

For example, Boundless Accelerator offers Canadian women between $5,000 and $10,000 in funding to put towards business scale-up services through the Rhyze Up! program.

Telus offers an interesting program called STORYHIVE to fund content creators with a desire to start or expand content specifically for racialized communities in British Columbia and Alberta.

Compare business loan options you might qualify for in the table below.

Compare other small business loan options for Canadians

The following business loans are available to all business owners, as long as you meet the lender’s eligibility criteria. Eligibility typically centres on business-related factors such as a required minimum business income per fiscal year, your business must have been operational for a certain number of months or years, and you must have a minimum credit score, among other factors.

To find a business loan that best fits your needs, check out our loan comparison guide:

1 - 3 of 3
Name Product APR Range Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered Broker Compliance
Journey Capital Business Loan
8.00% – 29.00%
$5,000 - $300,000
6 - 18 months
6+ months
Term Loan, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000.

Journey Capital offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.
Merchant Growth Business Loan
12.99% - 39.99%
$5,000 - $800,000
6 - 24 months
$10,000 /month
6 months
Unsecured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales.

Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.
Loans Canada Business Loan
6.60% - 29.00%
$4,000 - $500,000
3 - 60 months
over $10,000/month
100 days
Unsecured Term
Loans Canada is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.
To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year).

Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.

Canadian government grants and funding resources

In addition to community-specific lending programs, there are additional resources that can help. To start, use the following resources to determine what is available to your community and what eligibility requirements must be met.

Innovation Canada

Innovation Canada is the federal department tasked with growing the economy by supporting innovators and entrepreneurs. Part of their mandate is to collect and keep a large database of government funding opportunities and services—including grants and business loans aimed at helping businesses owned and operated by visible minorities.

Start by searching their database. To narrow down your search, answer a few questions about your business and the type of business support you’re looking for, such as business loans for entrepreneurs, black-owned business grants, small business grants, BIPOC (black, indigenous and other people of colour) business resources and loans for small business, among others.

Business Development Bank of Canada (BDC)

The Business Development Bank of Canada (BDC), is the nation’s only financial institution that operates solely for entrepreneurs. The BDC offers many financing programs and training resources for a wide range of business sectors and communities. Some of the programs geared towards racialized groups, include:

Business grants for racialized persons in Canada

At this point in time, there are very few business grants geared specifically toward BIPOC and racialized groups in Canada. Instead, most grants offered in Canada are open to all entrepreneurs and business owners.

To help find a grant, based on your eligibility, check out the Government of Canada database, where you can search all available grants and contributions. (Contributions are similar to grants but often come with an agreement outlining requirements—sometimes called “performance conditions”—on how the funds will be used.) Also, check your provincial or territorial government website for more information on specific funding and grant opportunities for business owners in that region.

Another option is to research business grants created to help specific industries, such as technology, retail, tourism, and agriculture. Examples include the British Columbia Buy Local Program, which is geared towards funding businesses engaged in the agriculture and food industry and the Northern Ontario Heritage Fund Corporation (NOHFC) which is dedicated to helping small businesses based in Northern Ontario.

For a list of the most popular grants for business start-ups, check out our guide on startup grants.

What’s the difference between a loan and a grant?

The short answer: Loans must be paid back, while grants do not.

When you receive a loan, the lender expects you to repay the amount you borrowed, plus interest (the cost of borrowing that money, usually expressed as the annual interest rate).

A grant is free money. You get this money with no expectation of having to pay it back and without having to pay fees. Unfortunately, grants are the more popular funding option when it comes to starting or growing a small business. As a result, grants usually restrict an applicant’s eligibility or require the money to be used in a specific way.

Other sources of funding

Merchant cash advances

A merchant cash advance lets you borrow money in exchange for a percentage of your daily credit card and debit sales, so the amount you pay will be lower when you sell less. Lenders determine the amount you can borrow by looking at your historical sales data.

Online lenders

Across the board, business loans from online lenders are a convenient way to get financing. There’s less paperwork compared to a bank and a shorter application process, even if you’re a small business. While they may be more lenient with which businesses they approve a loan for, you may have to compensate by paying higher interest rates on your loan, depending on your business plan and credit score.

Invoice financing and invoice factoring

Often used by B2B (business-to-business) and B2G (business-to-government) companies, this option consists of lenders advancing you an amount based on what customers owe you. Factoring companies charge a small percentage of the value of your invoices as either a fixed rate fee or a tiered fee that increases based on how long customers take to pay their invoices.

Private equity firms

Private equity firms may be interested in supporting your business by offering short-term high-interest loans or funding for a large stake in your company. If you’re not willing to give up some of your ownership, look elsewhere for funding. With a stake in your company’s success, you may find mentorship and development opportunities via this route but it’s worth noting private equity firms tend to scope out large-scale business opportunities with a major payout so startups may not be on their radar.

Angel investors

Angel investors are wealthy groups or individuals who give money to promising businesses with the expectation that those businesses will grow and return a sizeable profit. This type of financing is often given to companies that specialize in software, technology, mass market consumer goods, equipment and specialist products.


An increasingly popular alternative to traditional business loans, crowdfunding allows you to advertise a new product idea or startup business and allow anyone—friends, family or complete strangers—to contribute small amounts of money to help you reach your goal. In exchange, donors get some form of compensation or gift, which varies based on your preferences and the crowdfunding platform you’re using.

Canadian law protects minorities from being discriminated against in the process of applying, and getting approved for, business loans. Grounds for discrimination are laid out in the Canadian Human Rights Act, which makes it illegal to treat a person or group badly based on any of the following factors:

  • Race
  • National or ethnic origin
  • Colour
  • Religion
  • Age
  • Sex
  • Sexual orientation
  • Gender identity or expression
  • Marital status
  • Family status
  • Disability
  • Genetic characteristics
  • A conviction for which a pardon has been granted or a record suspended

Remember, visible minority groups can be broadly classified by characteristics such as ethnicity, gender, physical disabilities and other social and economical designations.

According to the Employment Equity Act, the Canadian government considers visible minorities to be “persons, other than Aboriginal peoples, who are non-Caucasian in race or non-white in colour” (S.C. 1995, c. 44, current to Feb. 11, 2020).

Loan qualifications for minority-owned businesses vary by lender and program. If your business has multiple owners, some of whom are not minorities, you may have to show that the minority business owners have the primary (larger) stake in the company. Certain loans or grants may also come with limitations on the size or revenue of businesses that can qualify for funding. Additionally, lenders may want to check your personal and/or business credit history.

How to apply for a business loan or grant

It’s smart to outline your business plan before applying for funding. Donors and lenders will want to see that you have a solid plan for success but that you need financial help to succeed. You should also gather documentation showing the state of your personal finances, especially if you’re applying for a loan based on financial need. Expect to get a hard check on your credit score as well.

Application checklist

Requirements for different loans and grants vary, but here’s a quick guide to the documentation you may need:

  • Your business tax returns
  • Financial statements for your business for the past three years
  • A balance sheet for your business for the past three years
  • Lease agreements
  • Proof of business ownership
  • Business asset transactions
  • Provincial/territorial filings
  • Your personal financial information
  • A detailed long-term business plan
  • A prepared presentation that goes over your business plan and financial needs

If you already have a business in another country and want to expand to Canada, check out this government hub for information and resources on how to immigrate your business and what policies apply to you.

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