Appendix B - Business Development Program: Repayable Contributions Portfolio
Under the Business Development Program (BDP), ACOA provides interest-free,
unsecured loans to small and medium-sized enterprises to help them start up,
expand, improve productivity, develop new markets or undertake other growth-oriented activities. Commercial assistance is repayable over an average repayment
term of five to seven years. From inception of the BDP in 1995 until March 2004,
the Agency collected $213.2 million of repayable contributions.
On the overall repayable portfolio (BDP and inherited programs), annual collections
have increased steadily and reached $56.4 million
in fiscal 2003-2004, of which $50.4 million related to the BDP. The Agency generally
collects approximately 79% of annual forecasted repayments, about 15% being
rescheduled to future years, and about 6% to be defaulted and/or written off.
Collection of the overall repayable contributions portfolio is expected to total
at least $55 million in 2004-2005. The chart at right gives a picture of the
portfolio. The cumulative rate of defaulted contracts and/or write
offs since 1995 is 13.7% ($95.4 million of a total $694.8 million).
Risk Mix
| Risk Rating |
Portion of Portfolio |
Principal Outstanding
($ millions) |
| 1 Low |
9% |
29.4 |
| 2 Low -- Medium |
28% |
88.3 |
| 3 Medium |
39% |
124.2 |
| 4 Medium -- High |
18% |
55.7 |
| 5 High |
5% |
15.4 |
| Not yet rated |
1% |
1.6 |
| Total |
100% |
314.6 |
All commercial clients are risk-rated based on a five-tier gradation system.
Accounts are reviewed regularly and the level and frequency of monitoring applied
are adjusted in accordance with the risk rating. As of March 31, 2004, the risk
mix of the BDP repayable portfolio (excluding conditionally repayable accounts
where conditions were not yet met) was ranked as shown in the table to the right.
More Information on repayable contributions may be found on ACOA's Web site
at:
http://www.acoa-apeca.gc.ca/e/financial/repayable/index.shtml
