BDC plans to support Black and Indigenous business owners to reopen the economy
Michael Denham admits that he is not, by nature, very cuddly.
So the CEO of the Business Development Bank of Canada was shocked to be suddenly engulfed in a bear hug as he queued for a buffet lunch just after taking the top job there was. six years old, explaining where he worked abroad beside him.
“This entrepreneur told me that BDC saved his business, saved everything his family worked for, twice,” Mr. Denham said in an interview before his planned departure from BDC in July. “This hug made people understand the role BDC plays in the lives of its clients, the responsibility we have towards entrepreneurs.
This summer, Isabelle Hudon, currently Canada’s Ambassador to France, will take over as BDC’s first female CEO. She is a former insurance executive, with responsibilities that included managing the operations of Sun Life Financial in Quebec.
Mr Denham plans to take a few weeks off this summer and start a new job in September – he declined to reveal his next employer.
While Mr. Denham was at the helm, the 77-year-old BDC dramatically increased its support for Canadian small and medium-sized businesses. The crown corporation’s committed capital has grown 42% over the past five years to $ 36.5 billion – that’s the money that supports 62,000 entrepreneurs.
BDC reported a profit of $ 371.5 million in the first nine months of fiscal 2021, the state-owned entity’s most recent financial results for which the fiscal year ends March 31. Taxpayers have earned an average annual return on equity of 9.8% at BDC over the past decade.
Mr. Denham and his team at BDC, as well as the heads of each financial institution, have spent most of their time over the past few months ensuring that creditworthy clients who needed the cash to overcome COVID- 19 can get help. “When the pandemic struck last March, we made simplifying our internal procedures a priority,” he said.
BDC has 2,400 employees. “Hundreds of employees have transferred their responsibilities; for example, sales advisers have moved to roles in customer financing, ”Denham said, adding that the pandemic has been“ exhausting for all of our employees, but deeply rewarding ”.
Pandemic financing programs remain a priority for BDC. However, as Mr. Denham prepares to hand over the baton, he highlights BDC’s recent initiatives to help Canadians rebuild as the economy reopens.
In May, BDC partnered with many banks across the country to launch a $ 290 million Black Entrepreneur Loan Fund, a credit facility to help business owners facing systemic barriers to access. in the capial. BDC is contributing $ 130 million, along with a joint commitment of $ 128 million from the country’s six largest banks, Vancity and Alterna Savings.
In April, BDC announced an initial $ 150 million closing of the Indigenous Growth Fund, the largest mutual fund raised to date for Indigenous entrepreneurs. Along with BDC, the new fund has been supported by the federal government, Export Development Canada and Farm Credit Canada, and is aimed at business owners in remote and urban communities.
Looking ahead, Mr. Denham said BDC also plans to expand funding programs for cleantech companies and expand a $ 160 million funding program to support the development of intellectual property in companies. Canadian companies.
BDC announced the IP financing initiative last July. The program provides convertible debt to knowledge-based companies with revenues of over $ 1 million and assets, such as patents, that lenders, including banks, have traditionally struggled to fund.
Looking back over the past six years, Mr. Denham said one of BDC’s most significant accomplishments has been to support private venture capital funds which in turn support Canadian entrepreneurs. BDC invests in VC funds alongside institutions such as pension plans and high net worth individuals.
When Mr. Denham was appointed CEO, BDC supported four VC funds with more than $ 100 million in assets under management, a size that ensures the fund manager is expected to be viable over the long term. At the time of its departure, BDC invested in 19 Canadian VC funds with a capital of at least $ 10 million. Mr. Denham said: “The entire venture capital ecosystem in Canada is now buzzing.
Your time is precious. Receive the Top Business Headlines newsletter delivered to your inbox in the morning or evening. register today.