Succession Financing for Youth

The Canadian Youth Business Foundation (CYBF) is a national charity providing start-up mentoring, financing and business resources to help youth start their own successful business.

CYBF's Succession Loans must meet the same criteria as the Start-up Loans, with one exception:

• For Succession Loans only, the youth has until the end of the fifth year of operation to attain 51% ownership in the Company financed by CYBF. (Under normal Start-up criteria, the youth must have 51% ownership at inception.)

The CYBF provides business start-up loans up to $15 000. Loan repayments of three or five years are available.

Eligibility Criteria

• Between 18-34 years old
• Eligible to work in Canada
• Produces a complete and viable business plan
• Has been in business, fully operating, for less than 12 months
• Lives or opens the business in the community which is offering the CYBF program
• Has some training / experience related to their business idea
• Work with mentor for a period of two years
• Has a business that creates full-time sustainable employment for the applicant
• Has until the end of the fifth year of operation to attain 51% ownership
• Not a full-time student
• Loan proceeds may NOT be used for the refinancing of existing debt

Partnerships

If the business is a partnership, and only one partner meets the CYBF age criteria he/she must hold at minimum 51% of the partnership and meet all other CYBF criteria and be subject to the CYBF application process. If all partners meet the CYBF age criteria, then all are subject to the CYBF application process. If any partner is a minority shareholder and is over the CYBF age limit, they are not subject to the application process.

Incorporated Businesses

If the business is incorporated, the applicant must be the majority shareholder, having at least 51% of the voting shares and be involved in the day-to-day management of the business. The applicant must also meet CYBF's age and other criteria. If the business is incorporated and there are two or more shareholders and not one person holds the majority of the shares, then the shareholders who meet the CYBF age and all other criteria must hold the majority of the voting shares and are subject to the same application process. Any shareholder who meets the CYBF age criteria must be subject to the CYBF application process.

Summary

Start-up Financing Loan Terms 

• Amortized over 3 years if loan is $7 500 or less
• Amortized over 5 years for loans over $7 500
• Interest-only payments in the first year
• Principal repayments are made in equal monthly installments together with interest, over the remaining two to four years, depending on the amount borrowed

Interest Rates 

• First year, CIBC prime rate plus 2%
• Second year, conditional on timely payments, CIBC prime rate plus 1%
• Third and subsequent years, conditional on timely payments, CIBC prime rate
• Current interest rates may be obtained from CIBC

Fees

• $50.00 CYBF loan administration fee
• $10.00 CYBF monthly administration fee

New Brunswick Contact(s):
See National Contact.

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National Contact(s):
Canadian Youth Business Foundation
Suite 1410
100 Adelaide Street West
Toronto, Ontario  M5H 1S3
Fax: 1-877-408-3234
Toll-free (information): 1-800-464-2923
Web site: http://cybf.ca/contact-us/