Yukon Venture Loan Guarantee Program

The business program is an initiative between the Government of Yukon and:

• Bank of Montreal
• Bank of Nova Scotia
• Business Development Bank of Canada
• Canadian Imperial Bank of Commerce
• Däna Näye Ventures
• Royal Bank of Canada
• Toronto Dominion Bank

The program is administered by the Department of Finance, but businesses do not need to contact the Government to use the program. See the information below.

Eligible Businesses

• New business start-ups or expansions of businesses in the Yukon that have or project to have less than $5,000,000 in gross revenues and less than 100 employees
• The program is restricted to those businesses registered in Yukon and that pay Yukon corporate taxes

Eligible Activities

• Businesses involved in the development and distribution of new products or services, the export of goods or services, import substitution, high technology and information services
• Upgrades to tourism attractions and tourist accomodation facilities
• Ineligible activities include retail operations, refinancing of existing debt, speculative real estate transactions, changes in ownership and transactions involving withdrawal of shareholder loans
• The program will be primarily focused on new or expanded activities which will have the potential to expand the Yukon economy and create new jobs.

Guarantee Amounts and Level

• Minimum $10,000; maximum $100,000 guarantee
• Guarantee level is 65% of venture loan, principle only, and based on the net loss of the venture loan
• Example - a loan guarantee for $65,000 would support a $100,000 loan.

Repayment

• Maximum six year repayment term.
• Interest-only payments are permited in the first year.
• Note that commercial loans normally have a three year maximum term. This program functions as "patient capti

  Administration

• The program is delivered by participating financial institutions. These institutions receive the loan applications, evaluate the projects, approve or reject the application, and provide and collect the loans.
• This program is normally used in conjunction with the lending institutions' conventional business loans.
• Participants do not need to contact the Government of Yukon to use this program.

Government Responsibility

• The Government of Yukon determines eligibility, issues the venture loan guarantee, and if the guarantee is called, payment of 65% of the net loss on the outstanding principle amount of the venture loan.

Interest Rate

• The lending institution sets the rate within the established range of chartered banks commercial lending rates

Guarantee Fee

• There is a one time fee of 1.5% of the guarantee amount, payable on issuance of the guarantee.

Security

• The Venture loan represents that portion of the financing for which there is inadequate or no security available and will be established as a separate loan. The bank will take all reasonable security to support the loan, such as personal guarantees and general security agreeements as appropriate.

Equity

• Equity requirements will be determined by the bank, based on the nature of the project and risk involved.