Start-Up Loan for Youth

The Canadian Youth Business Foundation (CYBF) is a national charity providing pre-launch coaching, business resources, start-up financing and mentoring to help young Canadians start a successful business.

The CYBF lends young entrepreneurs up to $15 000 for their start-up and facilitates a mentor-match for each entrepreneur. 

Additional financing of up to $15 000 may also be available through the "CYBF-Business Development Bank of Canada (BDC) Start-Up Financing Program". 

Existing businesses can also receive up to $10 000 from the CYBF through their "Expansion Financing Program."

The CYBF does not require security for its loans - CYBF lends on character and a great business plan. 

Eligibility Criteria

• Between 18-34 years old
• Eligible to work in Canada (work permit holders are not eligible)
• 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
• Agrees to work with mentor for a period of two years
• Has a business that creates full-time sustainable employment for the applicant
• Must hold at least 51% voting share in the business (if a partnership)
• 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, he/she is 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 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
• no penalty for early re-payment

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 CYBF loan administration fee
• $10 CYBF monthly administration fee (will increase to $15 August 18th, 2009)

Manitoba 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
E-mail: info@cybf.ca
Web site: http://cybf.ca/contact-us/