Entrepreneurs who have a business idea that aims to make the world a better place--who are pursuing environmental, social, and cultural goals in their work--now have a new source of seed funding in Ontario.
The province, in conjunction with Toronto's Centre for Social Innovation and several private sector partners, has just launched what is being billed as Canada's first microloan program geared specifically to social entrepreneurs. The Ontario Catapult Microloan Fund--consisting of $600,000 that will be distributed to applicants in $5,000 to $25,000 increments--was officially unveiled on May 24.
"Everyone complains about access to capital," says Tonya Surman, CEO of the Centre for Social Innovation, who first brought the proposal to the province, "and I just got sick of it."
To try and improve matters, Surman proposed what she hopes will become an "evergreen" fund. The money for the fund comes from TD Bank, Microsoft Canada, Alterna Savings, KPMG and Social Capital Partners, and since it will be repaid by the recipients over time, the goal is to have the microloan program continue on an ongoing basis.
Surman says it's important for entrepreneurs to focus on the viability of their ideas, to test them in the marketplace and be sure they are offering something for which there is a real demand. That's why the fund is "not investing in early early early stage, we're investing in early stage" enterprises, she explains.
The fund is for social enterprises that are far enough along to have some sort of established cash flow but have hit their capacity limits and can "benefit from a cash infusion to facilitate the next stage of growth." More concretely, she goes on, that means people. "Really it's about job creation…I imagine 80 per cent of the money will be invested in [new positions]."
Applications will be accepted starting in mid-June. More information is available on Catapult's
website.
Writer: Hamutal Dotan
Source: Tonya Surman, CEO, Centre for Social Innovation