Jennifer Obleman
Northern News Services
Published Monday, January 7, 2008

YELLOWKNIFE - Northern businesses will have easier access to federal money in more places following the signing of a joint financing agreement by the Business Development Bank of Canada (BDC) and the Business Development and Investment Corporation (BDIC) of the NWT.

Pawan Chugh, left, chief executive officer for the NWT's Business Development and Investment Corporation, and Steve Zink, vice-president and area manager of Northern Alberta, the NWT and Nunavut for the Business Development Bank of Canada, signed a joint financing agreement last month that will make federal money more accessible to entrepreneurs and business people in more places in the NWT. - Jennifer Obleman/NNSL photo

The two organizations, which provide consulting services and loans to businesses, signed an agreement last month that will make federal programs accessible through existing territorial infrastructure, facilitating a one-stop shop for Northern businesses.

"This is a means to extend our reach. We had one branch in the NWT. Now we're able to extend our reach to the whole network of the BDIC," said Steve Zink, vice-president and area manager of Northern Alberta, the NWT and Nunavut for the Business Development Bank of Canada.

"Small to medium-sized entrepreneurs will be the winners here."

Prior to the joint financing agreement signed last month, the BDC's only NWT outlet was in Yellowknife; now information about BDC programs will also be available through GNWT offices in Yellowknife, Inuvik, Behchoko, Norman Wells, Fort Smith, Fort Simpson and Hay River.

"It's like having a partner on the ground all the time when we're not on the ground," said Zink.

Pawan Chugh, chief executive officer for the NWT's Business Development and Investment Corporation, called the agreement a milestone for the Northern business community.

"Two major organizations that help businesses with funding have joined hands," he said.

"There will be opportunities for them to go for higher amounts (of funding)."

The BDIC's funding limit is $2 million for a company or group of companies, while the BDC's limit is $40 million.

While most loans will likely be much lower than the combined $42 million limit, Chugh expects some clients, particularly in industries such as manufacturing, heavy equipment, and oil and gas, will be looking for larger loans.

"With the opportunities coming up in oil and gas, there will be companies requiring higher amounts," he said.

From April to November 2007, the Business Development and Investment Corporation (BDIC) of the NWT gave out $3 million in loans to seven businesses. In the previous fiscal year (April 2006 to March 2007), the organization doled out $6 million to more than 20 applicants. The BDIC can approve up to $45 million in loans at one time.

The Business Development Bank of Canada (BDC) provides 20 to 30 loans a year in the NWT averaging $600,000 and ranging up to $10 million.

Zink predicted the two organizations will do a lot of joint financing, helping Northern businesses grow and meet emerging opportunities.

"The mining sector and oil and gas is very capital intensive. They contract a lot of work. That's causing a lot of business expansion as mines and the oil and gas industry develop," he said.

Kirby Groat, president of the Fort Simpson Chamber of Commerce, said the joint financing agreement sounds like a positive step.

"That is always good, to have one place for two services. There's been no outlet for federal promotions and programs in the communities. It's a good idea to bring the federal services into the existing infrastructure," he said.

"The BDIC is the only outlet to get financing in the NWT. Banks are not supportive of small business ventures because of the risk."