A ‘Microfinancing Shift’ in Canadian Small Business Lending

As banks cut back on lending directly to small businesses, Lana Larder expands Canada’s role and lobbies for microfinancing interest from investors and government for capital for small businesses in Halifax, Nova Scotia.    

Fact: Even before the world wide credit crisis, according to Maclean’s Magazine, two thirds of the world’s population are not serviced by big financial institutions.

What is microfinancing? Microfinancing is predicted on the belief that access to affordable capital can play a critical role in unleashing the entrepreneurial capacity of individuals and/or business owners that can not access capital. Thereby raising each borrower’s standard of living and bettering  communities. 

 Usually, microfinancing provides opportunities for economically marginalized individuals and companies creating pathways out of poverty to economic self-reliance.  Microfinancing is an economic and social change agent. The benefits of these investments lead to long term and community wide benefits creating a healthier and progressive community, country and world.  However, because of the recent economic downturn and financial crisis there is a greater need for access to affordable capital for small business owners to open or grow a business. 

Financial Crisis: The recent economic downturn and financial crisis have underscored the need for access to affordable capital. 

Lana Larder knows opportunity when she sees it.  Shortly after she became president of Halifax Finance, a Halifax, Nova Scotia, Canadian based company focused on finding capital for start-up and small businesses for growth, in August 2008, she had to seek new avenues of capital to expand Halifax Finance’s services to small and medium sized businesses in Atlantic Canada.

Among Larder’s top prospects were alternative lenders including Angel and Venture Capital investors. With support from the Federal Government, Larder and five companies from Atlantic Canada visited New York city in April 2009 during the emerging worldwide credit crisis and received investment readiness training and access to Angel and Venture Capital investors.

November of 2009, Larder partnered with Silver Lining Ltd. and BusinessOwnersGetIt.com to implement a Canadian wide focus group to understand the challenges that small business owners faced to access capital. Larder already understood the challenges disadvantaged groups faced and had researched, studied and prepared a microfinancing plan for Halifax, Nova Scotia over the past four years.  Now, with the economic worldwide credit crisis exists a greater need. 

During this time, Larder was able to participate in a Canadian Wide Credit Challenge and provide her solution. “Winning this Canadian Wide award was a pivotal moment for me as I am passionate about making microfinancing accessible for small businesses in Halifax, Nova Scotia. I want to make this a reality in Halifax and have this as an alternative option for entrepreneurs, particularly women, because they have a harder time to access capital,” says Lana Larder.  There are many small businesses in the community that want this solution!

Canadian Wide Winner: What is your solution for banks or government to fulfill the need for small business owners – Larder provided her answer microfinancing and won!

“The recognition for this solution will help as I am now trying to get investors and government to invest in microfinancing in Halifax, Nova Scotia,” she said.  One week before Larder won the award, she had presented her plan to a potential investor in Halifax, Nova Scotia and had meetings lined up with more potential investors and the government.

Microfinancing typically lends to clients that banks consider too risky and is done worldwide and boasts of 95 percent repayment rates. During this recession, microfinancing loans in the United States have held up well, in part because they come with lots of hand-holding for borrowers. Microfinancing can play a growing role in financing small businesses in the recovery in Halifax, Nova Scotia. Larder’s solution – microfinancing can fulfill the growing gap in financing small businesses in the recovery.


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