Black business owners raise concerns about government loan fund

Some Black businesspeople say a new government program meant to bolster Black entrepreneurship is hard to access, offers unclear repayment terms and asks invasive questions about applicants' sexuality.

The Black Entrepreneurship Loan Fund was announced in September by Prime Minister Justin Trudeau. Its application portal launched late last month.

The $291.3 million program offers loans of up to $250,000 to businesses that are majority Black-owned. Black entrepreneurs starting companies or operating existing small businesses can also apply for funding.

The government contract to administer the fund was awarded to the Federation of African Canadian Economics (FACE), a non-profit incorporated in late January. The newly formed organization is headquartered in Prime Minister Justin Trudeau's Montreal riding of Papineau and is an umbrella organization for five black community based groups.

Toronto-based entrepreneur Cheryl Sutherland said she was excited about the fund at first.

"I felt like it was a really great opportunity for Canada to step up and do some really great things," she said.

But that excitement quickly turned to frustration once Sutherland started the application process. She and several other Black business owners who spoke to CBC News say the program doesn't make clear key aspects of repayment.

"Being a banker in my previous life, I went through and I tried to gather as much information as I could and I couldn't find anything in regards to repayment terms," Sutherland said. "I couldn't find anything in regards to the loan rates."

Personal questions

Toronto-based clothing designer Julz Ossom, who also applied for funding, said he was shocked when the online application form asked him to state his sexual orientation.

"Whether you are gay, whether you are bi, heterosexual, I'm like, am I coming for money?" he said. "Because the established banks, RBC, TD, Scotia, don't ask you these questions."

Talent agency owner John Campbell said he was also alarmed by the question about sexual orientation. "We found many of the questions infringed upon the Canadian Human Rights Act, for example, sexual orientation and preference," Campbell wrote in an open letter to FACE he shared with CBC News.

"The purpose of the loan was to help the community; however, the process is negatively impacting mental health."

When asked about the application questions, Tiffany Callender, CEO of FACE, told CBC News the goal is to find out who the applicant is "as a person."

"FACE is looking to the future," she said. "How do we connect entrepreneurs to opportunities and specific programs and supports that are related to their intersectionality? And of course, all of those questions stated on our website are not necessary to be answered in order for your loan to be processed."

FACE outlines its privacy policy on its website. It states that the organization may collect information on applicants from social media, such as photographs or comments they've posted.

Some applicants say they found the application process itself baffling and that FACE itself has been no help.

Montreal-based recording entrepreneur Hostan Gouthier said he tried to apply for a loan five times on the FACE portal and failed each time.

Failure to communicate

"I thought maybe there was a problem with their webmaster," he said. "So I contacted their webmaster and I got no replies. The second thing I did, I called them on their phones and their phones were not working."

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Gouthier also claims he attempted to reach the organization on social media but did not hear back.

"When you are assigned such a major task by the government, you have to have the chops first of all to know how to communicate with people," he said. "If you are not replying or you are not talking to people, something is definitely wrong."

Callender said the sheer number of businesses applying on the website has led to delays in communication.

"By leaving their phone number or sending an e-mail, we are processing at the very best that we can and we hope to extend our team to be able to better respond," she said.

Ryan Knight of the Afro-Caribbean Business Network said he wants to know how FACE ended up in charge of the program in the first place. He said his organization expressed an interest in managing the program to the office of Minister of Small Business Mary Ng, who is responsible for the fund.

"If it was open in public, I'm very deaf, because ... we were speaking directly to Minister Ng's office," he said. "We were part of the consultation when they asked us to do surveys.

"Why wouldn't we get an email to say, 'Hey, we're looking for people to manage the loan fund. Are you interested? Here is the open bid.'"

Ng confirmed the government did not issue a request for proposals to solicit qualified contractors. "Tackling systemic racism is what we are doing and we've been doing this with these organizations," she told CBC News. "And, no, you're not going to go tackling systemic racism by putting out RFP."

Ng said FACE was the right choice to run the project. "What I would say about the group that's managing this fund is that they have 35 years of experience [as] organizations supporting directly Black business organizations," she said.

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Conservative Leader Erin O'Toole says his party would have created a better system to support Black entrepreneurs.

No loans have been awarded through the program so far. Ng said FACE will begin issuing loans in early July. "I am very confident that FACE and in the work that they're going to be doing, will be able to adjudicate and will be able to disperse loans," she said.

Knight said he's still concerned about what he sees as a lack of oversight and due process.

"You don't want the program to get demolished because due process wasn't followed," he said. "They didn't go through due process and that's what happened with the WE scandal."

For more stories about the experiences of Black Canadians from anti-Black racism to success stories within the Black community check out Being Black in Canada, a CBC project Black Canadians can be proud of.