Half a billion dollars have been set aside to help finance those businesses struggling through the oil and gas downturn.
The envelope of money was opened last week by the Business Development Bank of Canada (BDC). It is earmarked for companies who have had their struggles since the petroleum prices slumped in the past year.
Michael Denham, president and CEO of the BDC, said their data clearly indicated an entire population of small/medium businesses who were suffering for little other reason than their relationship with the petroleum sector, but with a little help could do better than just survive in the new commodity market conditions.
So the $500 million lending program was established for them.
"What we are looking to do is to provide loans to well-run, strong, small and medium businesses who need some support to get through these times," said Denham.
"We anticipate that they will use this money to invest in their operations, to improve their productivity, or I think more likely to do what they can to diversify their client and customer base, by investing in new marketing and selling capabilities, and also by investing in their production and delivery processes to have the means to sell to a new kind of customer, potentially new industries. So we are looking to sit down with each interested entrepreneur to look over their plans and look for ways to advance their priorities."
The program is national, because the petroleum industry has economic echoes throughout the economy, in places and ways not always thought of. Denham said they wanted to be prepared for the unexpected, so they imposed no geographic restrictions, but they anticipated the biggest pockets of interest would come from Saskatchewan, Newfoundland & Labrador, Alberta and "your part of British Columbia."
Prince George would likely be a location with plenty of affected companies because although this city is quite a distance from the actual oil and gas rigs, many of the service companies and contractors here are in some way connected.
Some may not have even realized their own participation in that economy until the prices of oil and gas dipped, curtailing production in those industries. The negative effects have been cascading down the economic ladder ever since.
Prince George is a radiator city in the financial industry, too, and so, with a BDC branch in Prince George, Denham is hoping the affected companies of the entire region will call on the P.G. office to inquire about the financing options.
"Our hope is, those looking for this funding will approach us and case by case will begin to look at their plans together.
"We will have a very forward-looking view on this, because a number of well-run companies for a variety of reasons have probably encountered some difficulties, so we will be looking at the quality of the plan on a forward-basis and work with them to make sure any loans they tap into will position them for success in today's environment."
The BDC is not a traditional lender.
They rely on the charter banks and other investment sources to offer the bulk of financing to the commercial and industrial ventures of the nation, but they are a federal Crown corporation mandated with filling in the financing blanks and often directly complementing the services of the mainstream lenders.
In addition to financing options, the BDC will also work with company owners and managers as advisors on how their business plan looks, what kind of financial choices they might want to make, and act as a consultant for those entrepreneurs who usually can't afford to hire their own financial advisors.
Times of market flux are always times of stress for small businesses, he said, and sometimes that leads to decision-making that isn't helpful in the long run.
Business operators do the best they can, and many thrive, but sometimes a little help is needed and the BDC is there with that help.
With some financing and some expert eyes on the business plan, local companies could transform themselves in this time of petroleum recession.
"I just encourage them to think in the following lines: they need to think of ways to reposition their business to not just make money but find a way to thrive in the pricing environment we see today. It is risky to count on price increases. I want entrepreneurs to control their destiny and make changes to succeed in today's environment," Denham said.
"I just think with tools like this one, and others being put out there, they will have the support they need for this temporary period of time. And that, combined with their tenacity and their creativity and their drive and their prudence, makes me feel very optimist that we will get through this."
