BY KIRK STARRATT
Kings County Register
After 20 years, the Hants-Kings Community Business Development Corporation (CBDC) is going strong as an economic development engine.
Executive director Ken Crichton, who presented the Hants-Kings CBDC’s annual report for the 2007/ 2008 fiscal year to Kentville council Dec. 10, said it was a very good year for the organization.
The CBDC started in Windsor in 1988, before opening an office in Elmsdale in 1993 and another in Kentville in 1996. Crichton said they basically manage two federal government programs, their loans program, which they administer with the Atlantic Canada Opportunities Agency (ACOA); and the Self Employment Benefit (SEB) Program, which they administer with Service Canada. They offer CBCD term loans up to $150,000, Technology Development Fund (TDF) loans up to $150,000, seed capital term loans up to $20,000 and Students In Business (SIB) term loans up to $5,000.
Crichton said the SIB term loans are interest-free and, when students repay them at the end of the term, they receive a 25 per cent rebate. One such loan was granted in Kentville last year, according to the annual report, but there were probably more. They could have been accounted for with Wolfville numbers if, for example, the student attended Acadia University and gave their address as such.
The Self Employment Benefit Program (SEB) assists people on Employment Insurance or people involved in some Department of Community Services programs start their own businesses. There were 52 applications for the SEB program in Kings County last year, and 42 were accepted. Those 42 people started businesses, representing 63.5 jobs. People taking the program are required to take training seminars and they have access to a business counsellor for 35 weeks.
Under their CBDC loan programs, Crichton said they approved a total of 168 loans in 2007/ 2008, worth a total of $3.7 million. Of that, six loans were issued in Kentville, worth $312,500 or 11 per cent. Of the 85 Seed loans totaling $585,000; 11 were issued in Kentville or 16 per cent.
The Hants-Kings CBDC realized a surplus, or profit, of $858,972 last year, which will be put back into the investment fund.
“We have nearly $14 million invested in Hants-Kings businesses now,” Crichton said. “We are, by far, the largest of the 13 CBDCs in Nova Scotia.”
In addition to CBDC loan funds, the community impact through other loans and investments, or leveraged funds, for 2007/ 2008 was $2,128,117.
CBDC charges eight per cent interest on its loans and gets $400,000 in operating funds from ACOA each year. However, Crichton said even if you took the ACOA funding out, they would still realize a hefty surplus. They view the ACOA funding as a fee for services because the CBDC goes out and does the work.
An average of $1.5 to $2 million from loans repaid each year and they have to borrow from a CBDC fund in order to lend to businesses. Borrowings outstanding as of March 31, 2008 totaled $2,388,000, with an annual interest rate of three per cent. The majority of these funds are amortized over a five-year period.
Crichton said the CBDC isn’t trying to compete with banks in terms of providing the lowest borrowing rate: they don’t have the resources. Banks are currently charging around six per cent interest on mortgages, for example, and most have commercial interest rates from three to four per cent over prime.
For the 2008/ 2009 fiscal year, the Hants-Kings CBDC has a balanced operating budget totaling $1,048,550.
The Hants-Kings CBDC is one of 41 CBDCs in Atlantic Canada, non-profit based organizations serving rural areas through a partnership with ACOA. For more information, call the Windsor office at (902) 798-5717, the Elmsdale office at (902) 883-8879 or the Kentville office at (902) 679-6215.
