What government loan programs help small businesses in Newfoundland and Labrador?

This page covers Newfoundland and Labrador only. The provincial programs below are run by the Department of Jobs, Growth and Rural Development (JGRD), and its program pages set who qualifies. One of them makes repayable term loans, one provides loan guarantees along with down payment loans and interest rebates, and one makes non-repayable contributions. Each page can change, so confirm the current version with JGRD before relying on it. For what loans in general can pay for, see what a small business loan can be used for.

The Business Investment Program

The Business Investment Program provides term loans to small and medium-sized enterprises in strategic growth sectors, as identified by JGRD. The program page says the fund is also available to businesses that have export potential and need help to enter or expand in external markets. The loans are repayable, with an interest rate tied to the Bank of Canada rate. The page says that rate is subject to change, so read the current figure there rather than from a summary.

Who the program is written for

According to the program page, an applicant must normally be a small or medium-sized enterprise based and operating in Newfoundland and Labrador, within the employee and sales limits the page states. It must operate in a strategic sector as JGRD defines it, demonstrate its ability to undertake the work in its proposal, demonstrate its ability to access the financial capital to complete the project, and be in good standing with the Government of Newfoundland and Labrador. The page also says funds complement funding from conventional sources, where a need has been demonstrated.

Does it finance buying a business?

The Business Investment Program page describes project funding and growth. It does not mention buying a business. If you are planning an acquisition, ask JGRD whether a purchase could qualify, and ask a conventional lender what it would need alongside any provincial funding. Do not assume a term loan for a “project” covers a purchase price.

The Harvester Enterprise Loan Program

This is the one program here whose page mentions acquisitions: of fish licences, alongside the combining of enterprises. The Harvester Enterprise Loan Program is an enhancement of the former Fisheries Loan Guarantee Program and supports independent fish harvesters. A government guarantee may be provided for loans through eligible financial institutions, to assist harvesters in obtaining financing for, among other things, the combining of enterprises and licence acquisitions. The page also describes down payment loans, which help a borrower meet the down payment a financial institution requires, and interest rebates for interest paid above the bank prime rate, up to the program’s maximum financing charges. The page says the finance charges on guaranteed loans are negotiated between the borrower and the institution.

The Business Growth Program is not a loan

The Business Growth Program provides non-repayable contributions for projects or initiatives that help businesses start, innovate, scale and improve sales, locally, nationally or internationally. Its page names growth-focused, innovative firms operating within Newfoundland and Labrador that demonstrate commercial viability, and co-operatives or non-profit organizations that meet its conditions, as eligible. Because the money is a contribution toward a project rather than a loan, it is a different tool from the term loans above. Read the page’s limits and conditions before you plan around it, and ask JGRD whether a project that depends on a purchase of a business, rather than on new activity, would fit what the program funds.

What the harvester guarantee lists

The Harvester Enterprise Loan Program page lists the purposes a guarantee can support. They include vessel-related items such as construction, purchase and refit, the refinancing of loans owed to fish processors for fixed assets or licence acquisitions, and the refinancing of loans previously obtained from chartered banks for vessel-related purposes and fish licence acquisitions, concurrent with the combining of enterprises. The guarantee is provided for loans made by eligible financial institutions, so the borrower still applies to a lender. If the business you are buying or selling is a fishing enterprise, ask JGRD how a change of owner would be treated under any guarantee already in place.

Questions to ask before you apply

Program pages describe what a program is for, but they do not tell you how it applies to your sale or purchase. Ask JGRD which program, if any, matches your sector, and whether the department treats an acquisition as an eligible project. Ask whether a loan already held by the seller continues after a sale. Ask your own lender how provincial funding sits beside its loan. For the federal side of acquisition financing, see government-backed acquisition lending.

Federal programs that apply here

Two federal programs sit alongside the provincial ones. The Atlantic Canada Opportunities Agency’s Business Development Program helps entrepreneurs launch, modernize and grow their business in Atlantic Canada. The Canada Small Business Financing Program shares risk with lenders, and its page lists the purchase or improvement of new or used equipment among permitted uses.