Frequently Asked Questions
Do you have grants or non-repayable funding?
No, we offer financial assistance in the form of repayable loans for new or expanding businesses or for the purchase of an existing business in our region.
What can loans be used for? i.e. Can I get a loan to purchase a vehicle for personal use or debt consolidation?
Eligible activities for loan funds include:
- Starting or expanding a business
- Purchasing and applying new technology
- Upgrading facilities and equipment
- Developing marketing and promotions materials
- Establishing working capital for anticipated sales increases
What is your interest rate?
Interest rates can be as low as RBC prime plus 2%, depending on the level of risk involved with the loan.
What is the minimum/ maximum loan amount?
The approved amount will vary depending on the needs of the business. We can meet the needs of most businesses.
Do I have to submit a full business plan with my loan application?
- New business: applicants with new businesses/startup will need to submit a complete business plan that includes financial projections and market research.
- Existing business: applicants with existing businesses will need to provide an outline of what they propose to do with the loan proceeds and the benefit it will have on the business, supported by financial statements and financial projections.
What does Community Futures do?
At CF Central Island, we are in the business of funding dreams by empowering entrepreneurs to start, grow or scale their business to higher levels of success and contribution. We provide flexible and affordable small business loans, business coaching/training services and business management tools for people wanting to start, expand, franchise or sell a rural business.
What other services does Community Futures provide?
At CF Central Island we lend more than just money. We lend our ear, advice and support. We are more than just a financial institution; we invest in people and success.
We are committed to exploring and assessing the 4 C’s of success with our clients to empower them to reach maximum potential with our Growth Catalyst Formula:
(Conditions + Cash flow + Capacity) x Communication = maximum potential.
When conditions, cash flow and capacity are fueled by effective communication: It’s Possible.
Who can apply?
Applicants who are looking to start, purchase or already own a business in the Central Vancouver Island area. This would include Individuals, businesses or organizations who require funding for start-up costs, working capital purposes, capital acquisitions, expansion or purchase of an existing business.
Residents, businesses or organizations of the Central Vancouver Island area who are unable to access funding from traditional sources (i.e. Chartered Banks, Business Development Bank of Canada, Credit Unions, etc.). Community Futures works in partnership with traditional lenders in order to meet the borrowers full lending requirements.
All applications must be completed and accompanied by a well thought out and realistic business plan.
What do I need to do to apply for a loan?
For Start Ups and to ensure a timely response to your financing request, please compile all of the following information and materials prior to submission of your application to our office for review and consideration:
- Completed loan application(s) and personal net worth statement(s) signed by each borrower and guarantor, including spouses.
- Copy of your most recent business plan, including marketing plan.
- Detailed listing of all capital assets, including make and model year, year of purchase and purchase price.
- Financial Projections supported by market research
For Existing Businesses, the following additional information must also be included:
- Externally prepared financial statements for the past 2 years of operations
- Current Aged Receivables and Payables Listings
What is Community Futures?
Community Futures is a non-profit organization with independently run offices throughout rural BC with a mandate for small business and community economic development. Community Futures provides financing alternatives to small and medium enterprises when access to credit is a challenge to starting or growing their business. Different than a bank, Community Futures uses different lending criteria, focusing on rural development and providing business financing to small local businesses. We also work in partnership with other business lenders, educational institutions, not-for-profits and community governments to grow and diversify the local economy.
Where are you located?
#13-327 Prideaux Street, Nanaimo, BC, V9R 2N4
How do I start a business?
Community Futures is a great place to get started. We can identify the necessary steps to starting a new business and provide you with resources to help you take that first step. The following are the basic steps most new small businesses need to take before they can begin operating in B.C. (further information and guidance can be found here)
- Make Sure Running a Small Business is Right for You
- Decide on a Business Structure
- Develop a Business Plan
- Choose a Business Name and Have it Approved
- Register Your Business
- Secure Your Online Presence
- Register for Provincial Sales Tax (PST)
- Register for Goods and Services Tax (GST)
How do I register a business?
If your business is a sole proprietorship or general partnership, you can register it quickly and easily with the Province of British Columbia online using the OneStop Business Registration Service.
Do I have to be on Employment Insurance (EI) to apply for a business loan?
No, you do not have to be on EI to apply for a loan.
What term and amortization do you offer?
As our loans are created in line with the needs of your new or growing business, terms and amortization periods can vary depending on your individualized need.
How do you determine my monthly payments?
Monthly payments are dependent on your amortization period and interest rate. However, it is worth noting that we don’t charge a penalty for early repayment.
Do you require security?
The security requirements vary with the amount of the loan. In all cases we seek to obtain adequate security to ensure repayment in the event of default. Types of security frequently taken include, but are not limited to, the following:
- Promissory Notes
- Real Property Mortgage/Assignment of Insurance
- General Security Agreement
- Personal Guarantee
- Assignment of Life Insurance
How much time do I have to pay back my business loan?
The term of the loan depends on the nature of the business, cash flow and amount of the loan. Payments can be amortized over a longer period in order to reduce the monthly payment amount.
What are some of the considerations for my loan application?
Loan approvals are based on, but not limited to the following criteria:
• Credit history of the applicant.
• References – personal, business and credit.
• Management Skill – the level of industry and/or business experience the applicant possesses.
• Viability – the business’ ability to meet all financial commitments while still making money. This is demonstrated through the business plan and financial projections.
• Equity – the amount of money the applicant has or is prepared to invest in the business.
• Industry conditions.
• Local labor and sector conditions.
• Land, buildings, equipment, vehicles, inventory, accounts receivable and other assets which can be used to secure the loan.
• Quality of the collateral (depreciation rate, salability, market conditions).
How much does a loan application cost?
A one-time, non-refundable 2% administration fee is added to all approved loan applications.
Where do you have to live to borrow money?
Our organization serves the needs of businesses, individuals and community groups throughout the central island area. Located in Nanaimo, we assist entrepreneurs throughout central Vancouver Island from Ladysmith to Bowser, Whiskey Creek to Gabriola and Lasqueti Island and points in between.
Do I need to have registered for GST?
You must register for the GST if your business is engaged in commercial activity with annual sales and revenues of GST-taxable goods and services of over $30,000, or you are a taxi or limousine operator.
If your annual GST-taxable sales and revenues are under $30,000, you are not required to register, but may register voluntarily as long as you are carrying on a commercial activity.
When you register for the GST, you will be assigned a Business Number (BN). For full details, or to register, contact CRA: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-register-charge.html
You may also register through the One-Stop Business Registration site at www.bcbusinessregistry.ca
Is a down payment required?
No, a down payment is required, however we do charge an application fee and a documentation fee to process your funding request.
How do I apply and what forms do I need to complete to apply?
- Contact our office prior to filling out any applications
- Develop a business plan, including financial projections.
- Complete the required Loan Application
- Submit both the completed application package and your business plan to the Community Futures office. Ensure that the application package is signed by yourself (the applicant/s) and your spouse, married or common law partner/s.
- A credit check will be conducted on all applicant/s and their spouse/s.
- Attend an interview with Community Futures loans staff to discuss your business plan.
- Supply any additional information that may be required.
- Loans under $25,000 are assessed by Community Futures loans staff for approval. Applications for these loans can be submitted at any time.
- Loans for more than $25,000 are presented to the Loans Committee (comprised of local volunteer directors) for approval. You will be advised of the date of our monthly loan meeting and by when we need to have received your application and support information. Upon approval, we will contact you with information concerning the decision. Our “Discussion Paper” outlining the terms and conditions of the loan will be prepared for your immediate review.
- Upon your acceptance of the terms and conditions set out in the offer, we will commence preparation of the legal security documents.
- Once the security documentation is completed and executed by you we will be in a position to disburse the funds.
How long will it take until I receive the money?
The time requirements before funds can be disbursed vary with the complexity of the loan and completeness of the application.
Loans under $25,000 are assessed and approved by staff and senior management. Upon approval and the security documentation is completed and executed by you, we will be in a position to disburse the funds.
Loans over $25,000 are submitted to the volunteer finance committee on a monthly basis. Once approved by the committee and the security documentation is completed and executed by you we will be in a position to disburse the funds.
A simple loan may be disbursed quickly; whereas a complex loan where legal council is required may take weeks or even months to finalize the contracts.
If my loan is not approved, do I have any recourse?
Staff/Senior Management Rejected Loans
Should an applicant’s proposal for financial assistance be declined by staff and senior management, the applicant shall have the option of appealing the decision to the Loans Committee.
If the application is subsequently declined by this second review of the Loans Committee, the applicant shall have no further recourse to appeal.
Applicants have the option to re-apply for financing with a new and complete application package at any point following a rejection. The application will be considered as a new application.
Loans Committee Declined Loans
Applicants have the option to re-apply for financing with a new and complete application package at any point following a decline. The application will be considered as a new application.
What types of loans are available? Do you have loans for Entrepreneurs with Disabilities?
Community Futures offers specialty term loans and our loans offer flexible financing with repayment terms designed for your maximum advantage.
- General Loan Fund for business start-up, purchase or expansion.
- Youth Loan Fund for applicants 18-29.
- Community Business Loan Fund for businesses in the forest sector, aquaculture, manufacturing, tourism, developing or using clean or renewable energy, developing innovative technology or using technology in an innovative manner, beginning or expanding the export of goods or services from BC.
- Entrepreneurs with Disabilities Fund for business owners who are also managing ongoing health and disability issues.