Need Money to Buy Your Dream Cottage Resort? A CFDC Can Help

by Destination Northern Ontario | October 11, 2023

In the Destination: Northern Ontario podcast series, we’ve featured southerners who bought a cottage resort in Northern Ontario and have no regrets. After listening to these episodes, maybe you're ready to make the leap, in theory, but the actual dollars and cents are holding you back. 

If that's the case, tune in to Episode 5, which features one of the North’s best kept secrets: Community Futures Development Corporations. CFDCs are nonprofit funding organizations that offer sizable loans with generous repayment terms, even to businesses considered too “risky” by the banks. Our guest for this episode, Ryan Raynard, explains how they can do it.

Listen for all of his insights, or read on for highlights.

https://player.captivate.fm/episode/c529cba3-0c66-4c3c-a909-bc97de481e2a

What is a Community Futures Development Corporation?

CFDC’s, sometimes shortened further to CFs, are nonprofit business development and lending services funded by the Federal Economic Development Agency for Northern Ontario (aka FedNor). They provide business counseling, loans, and other services to entrepreneurs and small business owners. The financing can be used for startup or expansion.

Why Can CFDCs Take on More Risk Than Banks?

CFDCs are able to take risks because they're a nonprofit funded by the federal government for exactly this reason. Their mission is to help small businesses start up and thrive in rural and remote communities so they’re designed to take on that risk and develop local economies. The money they lend gives businesses an opportunity to get off the ground and prove their model. Once that happens, they can transition to the traditional lenders.

How Big of a Loan Can They Provide?

Each office can lend up to a maximum of $300,000. However, CFs can pool their funds with other offices in the region. The Northwest region investment pool can lend up to $600,000. In the Northeast, where there are more offices, the amount goes up to $750,000. 

For the business, this is money that can be leveraged for loans elsewhere. Ryan says they encourage business owners and entrepreneurs to look at other alternatives. They partner with traditional lenders, credit unions, BDC, NOHFC, and others to make the deals work. CF money can also count as equity with the banks. 

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Listen to the episode for more, including a walkthrough of the loan application process, tourism industry trends, and insights into a new partnership with SuccessionMatching.com that helps retiring business owners sell to new buyers.This episode concludes our podcast series…for now. Were these episodes helpful? If so, let us know. New episodes could appear in the future so subscribe or follow now on your favourite podcast platform to be notified when they drop.