How Canada can rebuild trust and accelerate access to capital for all entrepreneurs – Canadian Business – How to do better business

Canada’s strong and resilient economy owes much of its strength to the rich fabric of diversity woven into its economic fabric. An engine of innovation and global commercial attractiveness, the country’s varied talent not only benefits our companies but allows them to be more adaptable and competitive on the global stage. With this in mind, there are several ways in which we are not doing enough to support all of Canada’s innovators.

Gaining access to capital is a difficult task for any entrepreneur, but those from diverse communities, including Canada’s BIPOC population and the LGBTQ2+ community, often face additional barriers to obtaining crucial funding. At a recent Canadian business panel discussion on the topic, a group of experts identified a fundamental fracture contributing to this problem: trust, or lack thereof.

“Without understanding the unique cultural contexts, we are finding it increasingly difficult to deploy the capital we have available to all entrepreneurs in Canada,” said Isabelle Hudon, president and CEO of the Business Development Bank of Canada (BDC). It is important that banks and credit unions take this idea seriously and, through concrete actions, put all entrepreneurs at the center of their product and service offerings. A roadmap for building trust should include creating new partnerships and hiring talent who understand firsthand the needs of the communities they serve.

A second major challenge arises from the obstacles that entrepreneurs from financially underserved backgrounds often face. Historically, lending models do not favor entrepreneurs from socioeconomic backgrounds that limit their access to capital. As a result, it is natural for them to seek capital in spaces where their challenges are understood. “The first place many Indigenous entrepreneurs look for capital is within their own communities,” said Steven Morse, executive director of the Métis Voyageur Development Fund. “That, quite often, includes the Métis Voyageur Development Fund, among other regional Indigenous financial institutions.”

Despite the long road ahead, progress is being made. Another example of supporting Canada’s financially underserved communities is Meridian Credit Union’s business accelerator funding pilot program in partnership with BDC. The goal of this program is to increase access to capital for entrepreneurs who are often excluded from traditional lending models and to encourage business owners seeking capital to grow their businesses.

As Ontario’s largest credit union, Meridian has a mandate to invest in communities and support the small businesses that drive Canada’s economy. This comes in multiple forms, including traditional banking services, plus additional resources to help business owners start, manage and grow their companies.

The productivity of Canadian businesses is still not where it needs to be. We believe the way forward is to invest in an ecosystem that supports all entrepreneurs and gives them the resources and financial confidence to succeed in an equitable and sustainable way.

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