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Giving entrepreneurs and new Canadians a micro-loan boost

ACCESS Community Capital Fund, a Toronto-based microloan program, is after the little victories.

“I don’t think anyone we lend to is going to become a silicon valley billionaire and come back to Toronto one day and say, ‘I couldn’t have done it without you, here’s a significant amount of money,’ because that doesn’t motivate us,” says Don Inouye, chairman of the fund’s board of directors, which also includes members from Gowlings, York University, KPMG and CIBC.

“But if someone living in Regent Park is able to carve out a few hundred bucks so that they can save an emergency fund because their car is going to inevitably break down, and I can play a part of that — that’ll make me smile for the rest of my life,” he says.

Launched in 1999 as ACCESS Riverdale, the microloan fund has diversified to nine low-income communities including Black Creek (formerly Jane and Finch), East Scarborough and Lawrence Park. It’s geared towards entrepreneurs with viable business plans who can’t find financing through traditional sources.

Through contributions from impact investors and community supporters, the fund has grown to $150,000, offering loans of up to $5,000 for struggling low-income people or newcomers with an intriguing business idea.

“We provide a character-based loan — we loan the money to the entrepreneur and then they use that money to finance something within their company,” says Inouye.

Loans are offered at prime plus one per cent with the ACCF subsidizing the difference — significantly less than the prime plus seven per cent interest on loans offered by many financial institutions.

“We don’t want to tax our clients, these are people who are already low income and on social assistance for a variety of circumstances,” he adds.

The registered Canadian charity also benchmarks $250,000 to provide mentorship and skills training for entrepreneurs in house.

It’s that combination of working capital and mentorship that drew Carol Cao to ACCF when she was looking to start her LED importing business — NCG International Ltd. — two years ago.

“The service went beyond financial support, they also have a look at your business plan in order for you to get the capital,” says Cao, who immigrated to Canada from China. Her mentor had previously found success in the importing world and was able to share valuable insight.

“We were speaking the same language by understanding the concerns of the business,” she adds.

Today, ACCF’s portfolio is diverse with 30 clients ranging from a unique floral shop in Riverdale to C-virtue, a Christian-inspired clothing line.

“Every applicant is different,” adds Inouye. “We’re helping good people do good things.”