Frequently Asked Questions:
Applying to ABC

1. What are the eligibility criteria for financial assistance from ABC?

Before a decision is made concerning ABC funding, each proposal is assessed on its viability and merits, and takes into account the need, the scope of the project, and other possible sources of financing, including funds received from other government departments and agencies. Basic eligibility criteria include:

1. Aboriginal ancestry
   An applicant must be: a Canadian Aboriginal individual (Status or Non-Status Indian or of Métis or Inuit heritage) or a Canadian corporation, partnership, association or other legal entity that is majority-owned or -controlled by Canadian Aboriginal people.

2. Equity
   ABC requires a balanced financial package, involving debt financing from other sources, as well as a minimum level of your own cash equity to invest in the project. When possible, ABC expects and encourages a higher level of financial participation than the minimum requirement to come from the applicant.

3. Experience
   ABC will assess your training, skills and experience, and the track record of an existing business. To be eligible for support, you may be required to take training in management, financing, or other areas.

4. Project Viability
   ABC will assess the viability of your project by examining factors such as financing, marketing plans, and management and operational capacity.

5. Environmental Considerations
   ABC must comply with the requirements of the Canadian Environmental Assessment Act (CEAA) and regulations, and have an Environmental Assessment of all projects requesting financial assistance when so directed by CEAA.

Additional eligibility criteria may apply, depending on the nature of the project.

2. I am already 35. Am I still eligible to apply as a youth entrepreneur?

Yes. As long as you have not yet reached 36 years of age when you apply (i.e. the date ABC receives your Statement of Intent). If approved for funding, your project must also proceed within a reasonable amount of time.

3. How does ABC define equity?

In the context of program eligibility, ABC defines equity as cash equity. Applicants may generate cash equity from personal savings, by pledging personal assets as collateral against a loan from a financial institution (these assets are not to be used in the business and must be repaid from personal, not business, sources), or be made up (in part) from First Nation or other government contributions.

For community-owned corporations, assets used as collateral for equity must be those over which the community has full discretionary authority.

At least one half of the applicant's equity investment in a project must come from personal resources. Money from First Nation or public sector resources may be considered equity, provided that the applicant has full discretion over the funds. ABC considers funding from another government department specifically for a project to be "other project financing" and does not treat it as equity.

(Please note that in-kind contributions or non-cash assets cannot be included as part of your minimum cash equity investment.)

4. Does equity have to be cash equity or can I include non-cash assets, such as a car, as part of my equity requirements?

Non-cash equity can be contributed, however it is not accepted as part of the minimum equity requirement.

5. Why do I have to provide equity towards the business project?

While equity may take a number of forms, it is essential that applicants put their own cash at risk. This creates a heightened attention to management and financial discipline, which ultimately leads to business success.

6. How much equity do I have to provide towards the business project?

For youth applicants (over 18 and under 36) the minimum equity requirement is 10 percent of eligible project costs.

For applicants who are 36 years of age or older, the minimum equity requirement is 15 percent of eligible project costs.

For applicants applying as an entity, the minimum equity requirement is 15 percent of eligible project costs.

For non-commercial ventures, there is no legal minimum equity requirement.

7. How do I provide proof of equity?

You can use a current bank statement to demonstrate that you have a minimum level of your own equity that you will contribute to the project or business.

8. Does ABC offer loan insurance?

No.

9. How long does the application process take?

Timelines will vary, depending on the scope and complexity of your project; your provision of a complete application package including the Statement of Intent and all supporting documentation needed to assess your project, and the time it takes for you to develop a business plan. Once a project is approved and you begin to implement your project, you will then need to prepare claims in order to receive payment from ABC. The best way to ensure efficiency in this process is to work closely with your development officer and provide all information needed to assess your project in a timely manner.

10. How will the screening committee assess my application?

When evaluating eligibility, the screening committee will consider the following:

Applicant Eligibility

• Is the applicant of Aboriginal descent? How will this be verified? (In the case of partnerships and corporations where one or more proposed owners is not Aboriginal, please refer to ABC's eligibility policies or speak to your development officer.)
• Does the applicant have the financial resources to undertake the business venture proposed?

Note: A credit check will be completed at this stage to determine your ability to access other forms of financing.

Business Project Eligibility

• Does the proposed management team have the skills required to undertake the project as described?
• Does the business idea make sense? For example, is there a good market opportunity? Does the proposal have a reasonable approach for reaching the market? Do the potential profits provide a sufficient return on investment?
• Does the business idea fit within the types of activities supported by ABC?
• Are there any environmental impacts to be considered?

Note: A number of other policies and guidelines pertaining to specific situations may have an impact on a project's eligibility for support. Ask your development officer about this.

11. I am ready to complete my business plan. What does ABC require in a business plan and what information is available to help me?

The requirements for your business plan depend on your particular project. Review our information about preparing a business plan and speak to your development officer.

12. Are there online resources to assist me in preparing a business plan?

You will find excellent resources on the Canada Business site, including an interactive business planner that can help you. Aboriginal women may also wish to consult the Indian and Northern Affairs Canada publication, Journey to Success: Aboriginal Women’s Business Planning Guide.