Northern businesses can have some financial burdens eased using a new program by Northern Development Initiative Trust (NDIT) and the National Bank of Canada (NBC).
In their discussions with northern entrepreneurs across the north, NDIT learned that one of the biggest problems in the northern economy was lack of supply chain financing. In short, there is often a financial gap between a company getting paid for its goods/services and being able to pay its own staff/suppliers.
"Northern Development does not lend money to businesses; we work with banks to leverage money," said NDIT's business development director Renata King. "This is a very specific piece of that, and it does not take away from our relationship with other financial institutions."
What the National Bank of Canada provides, in this new NDIT partnership, is a service other financial institutions in the region do not typically provide. NBC will front qualifying businesses the money they need to get through those gaps (often seasonal, or contingent on delayed third party transactions).
The options include things like 100 per cent inventory financing for up to 90 days (including NBC paying suppliers directly), and both accounts payable and accounts receivable financing whereby NBC buys a businesses' invoices (fronting the value now and taking the credit risk in exchange for repayment with interest later) - all to allow the business to have maximum financial agility out in the field.
"This is something new, and a key feature," said NBC's regional head of global banking Greg Harder. "This is not so much competition with other banks, this is a unique banking product...We routinely work in conjunction with other banks to meet a company's overall needs," and now they are working as well with NDIT's menu of economic development programs.
"National Bank does not have a presence here [offices in Prince George or the region] so we dragged them up here into this relationship," said King. "Our role is to build a stronger north - to engage with communities to enhance northern economies."
Supply chain financing has been going on in other jurisdictions and done for a long time by NBC. For more information on how it might help the businesses of this region, contact King at 250-561-2525 / ren...@northerndevelopment.bc.ca or Harder at 604-661-5520 / gregory.har...@nbc.ca.