Also called BDC financing
What is the Business Development Bank of Canada?
A federal bank that lends to Canadian businesses on longer terms and against less security than a commercial bank will.
What else it is called
- Other names
- BDC financing
- In French
- Banque de développement du Canada
Related entries
Understanding business Development Bank of Canada
A federal Crown corporation that lends to Canadian businesses, aimed at the gap commercial banks leave: longer amortizations, lending against equipment and growth rather than against real estate, and a greater tolerance for the risk profile of a manufacturer investing ahead of revenue.
For a plant the common uses are a machine purchase amortized over a period the machine will actually last, a building expansion, or the working capital gap created by growth. It frequently sits beside a commercial bank rather than replacing it, taking a second position on security.
It is a bank. The money is lent at commercial rates and has to be repaid, which distinguishes it from the research tax credit and the innovation contribution programme. Its advisory arm is likewise a paid consulting service.
In practice
The usual reason to look here is a machine with a fifteen-year life that your bank will only amortize over five.
Frequently asked
Is this grant money?
No. It is a loan at commercial rates, with longer terms and more flexible security than a chartered bank typically offers. The non-repayable support is in the innovation contribution programme and the research tax credit.