Business Development Bank of Canada

BDC is Canada's business development bank. From 100 offices across the country, BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to entrepreneurs.  BDC works with entrepreneurs in all industries, through all economic cycles and focuses on helping small and medium-sized businesses in their development projects, local and global. BDC manages a $10.6 billion loan and investment portfolio and serves over 28,000 businesses. As a Crown Corporation BDC is wholly-owned by the Government of Canada and is financially self-sustaining.

BDC’s mandate

BDC is mandated to be a complementary lender in the market, offering loans and investments that supplement or complete services already available from commercial financial institutions. Its financial activities include secured and unsecured loans; subordinate financing, which incorporates elements of debt and equity financing; direct and indirect venture capital investments with a focus on early stage high-technology ventures; and customized business consulting services.

Creating greater prosperity for Canada
BDC works to help entrepreneurs tackle their challenges and exploit their opportunities, recognizing that ambitious, risk-taking entrepreneurs are the basis of a vital, healthy economy.  When entrepreneurs succeed, they make an irreplaceable contribution to Canada’s economy and the result is greater prosperity.

At BDC, special attention is paid to start-ups, innovators, fast growth companies, manufacturers and exporters.  Another area of focus is entrepreneurs who are working to commercialize the fruits of research and development to create innovative products and globally successfully companies. Success in this area is complex, difficult and very risky; success takes years, millions of dollars and sophisticated skills.

In fiscal 2007-2008, BDC authorized $3.1 billion in financing, subordinate financing and venture capital investments. BDC’s total loan portfolio is about $10 billion, with support for a wide variety of sectors:  manufacturing, wholesale and retail trade, tourism, construction, transportation and storage, commercial properties, business services and other industries. 

BDC'S RESPONSE TO THE CREDIT CRUNCH

As a complementary lender, BDC’s role is magnified during economic slowdowns. To help clients cope with the credit crisis, BDC introduced a number of remedial measures as early as August 2007.
They included:

• Increased overall financing activity
• Extended repayment terms on new authorizations
• Offering postponement of capital repayment
• Increased support to manufacturers and a dedicated team to help Ontario auto parts manufacturers in particular
• The launch of a new working capital loan for expansion projects abroad

Business Credit Availability Program (BCAP)
To provide further relief to businesses, the Government of Canada announced, as part of its January 27 Economic Action Plan, an additional capital investment of $350 million in BDC. The aim is to enable BDC to provide at least an additional $1.5 billion in financing to help small and medium-sized businesses sustain operations and grow during a period when credit markets are constrained.

As a result, BDC has introduced the following: 

Increased term lending activities
A total of $250 million in capital has been allocated to increase term lending and help Canadian businesses that need more financing than current lenders can provide alone.

BDC is working in partnership with private financial institutions to provide additional loans and other forms of support to creditworthy businesses whose access to financing would otherwise be restricted.

A key element of the program is an enhanced relationship between BDC and financial institutions for referrals and deal sharing. This is being facilitated through joint corporate communication plans and a grassroots approach at the local branch offices. The result is close collaboration on syndicated loan transactions for large clients, coordinated efforts for small loan processing and purchased participation in commercial mortgages.

Operating Line of Credit Guarantee
On June 25, 2009, BDC announced the launch of its Operating Line of Credit Guarantee; a time-limited facility that allows BDC to guarantee lines of credit that financial institutions already extend to their clients. The guaranteed portion goes above and beyond what banks are already committing. Through this program, financial institutions and BDC will share the risk while providing increased support to their clients. The Operating Line of Credit Guarantee applies to operating lines of credit with authorized limits of a minimum of $400 000 and a maximum of $40 million. The BDC received $100 million to establish the Operating Line of Credit Guarantee, with the total market impact estimated to be at least $300 million.