The time is right for investing in the Yukon’s economy, says the federal government.
Almost $2.5 million in federal funding has been given to Dana Naye Ventures to administer loans of up to $100,000 to small aboriginal and non-aboriginal businesses having difficulty securing funding from other financial institutions.
The money from Indian and Northern Affairs Canada creates the $2.45-million Dana Naye Venture Canada Loan Fund and will annually provide an estimated 20 loans during the fund’s five-year reporting period.
“It’s exciting to have a new pot of money. This is perfect timing for the new funding,” said Dana Naye Ventures general manager Elaine Chambers, adding that a growing economy and recent land settlements have created a friendly climate for entrepreneurs.
The organization has already approved funding for three projects, including one in the airline industry and one in the tourism sector.
Confidentiality prevents the company from naming specific loan beneficiaries. While any small business can qualify for loans if it meets the requirements, lately many applicants are tourism-related, said Chambers.
“That’s what the Yukon’s all about,” she said.
Funding is provided to small businesses that might otherwise not be well-received at a commercial bank, said Chambers.
“We help woodcutters; we help trappers. We help a variety of small entrepreneurs,” she said.
Whitehorse-based, aboriginally-controlled Dana Naye Ventures is a non-profit developmental lender working in the Yukon and northern BC since 1985. The company provides financing and business training for entrepreneurs who qualify for loans after demonstrating the financial viability of the proposed business.
Companies like Northerm, Air North and the Vuntut Gwitchin First Nation, as well as the Carcross/Tagish First Nation Four Mountains Resort, have each benefited from Dana Naye’s services in the past.
More investment in small businesses means more employment for the region and could lead to new start-ups, said Karen Dove, manager of community and economic development, Indian and Northern Affairs Canada for the Yukon region.
“It’s good news for the territory in that it will allow a number of small businesses who have good ideas to be able to access that capital to move forward and develop their businesses,” said Dove.
“Clearly, now is a good time for investment into the territories.”
The federal government chose Dana Naye to administer the loans because of the organization’s experience and national reputation, said Dove.
“Many people don’t know this but Dana Naye Ventures is well-recognized nationally as a developmental lender,” said Dove. “It’s the only developmental lender in the territory and it’s already running similar programs. We wanted to build on the skill-set already there in the organization.”
Most commercial banks will look at loans but would rather give out lines of credit for small business, and loan decisions are made in main offices outside of the community.
This often discourages small entrepreneurs, said Chambers.
And that’s not to mention the paperwork, she added.
“We take more risks than the commercial banks,” said Chambers.
“But there’s still a process. We have our own paperwork, but we make the decisions within our office.”
The company has about $10 million in total loan funding and operates two separate funds used for small business loans, one for aboriginals and one for non-aboriginals, but the new funding is open to both groups.
Repayment schedules are set on a case-by-case basis, as are interest rates, and depend on the equity of an applicant. If a small business is seasonal, then repayment is expected only during the season of operation, said Chambers.
The new money is a one-time payment from the federal government.
“It’ll help the businesses that might be struggling right now and could use a little boost,” said Chambers. “If we lend out all the money there’s always room to go back if we’ve spent it all.”
The funding was announced Friday in Whitehorse by Conservative MP Gerry Ritz. The announcement is part of the government’s Strategic Investments in Northern Economic Development initiative, which aims to strengthen the three territorial economies.