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Business Development Bank of Canada (All You Need To Know)

Who is the Business Development Bank of Canada?

Looking to learn more about the BDC?

What are the essential elements you should know!

Keep reading as we have gathered exactly the information that you need!

Let’s dig into our business knowledge!

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Let’s get started!

Who Is Business Development Bank of Canada

The Business Development Bank of Canada (Banque de développement du Canada in French), also commonly known as BDC, has been in existence since 1944 under different names.

BDC is a Canadian Crown Corporation fully owned by the Government of Canada tasked to support businesses across Canada.

It’s main objective and mission is to provide financing and advisory services to small and medium-sized businesses (SME). 

In addition to that, through its subsidiary BDC Capital, the Development Bank of Canada offers further financing options such as venture capital, equity financing, growth and business transition capital. 

The BDC does not have a strong focus on business start-ups on a pre-commercialization stage although it may offer financing options through its subsidiary BDC Capital.

Generally, for a start-up or a new business to be eligible for financing at the Development Bank of Canada, it must be able to demonstrate that:

  • It has a concrete and realistic market and sales potential
  • The company management have the necessary experience
  • The company founders have a good personal credit or references
  • The founders have already made reasonable investment in the company 
  • Have a strong business plan

One important reason why entrepreneurs and businesses choose to obtain financing from BDC is that they offer flexible repayment terms.

This means that a business owner may be able to get financing having a repayment schedule allowing it to defer certain payments or other flexible arrangements deemed appropriate by the bank.

What Do They Do

What’s important to keep in mind is that BDC is a commercial bank and provides commercial lending services.

As a result, its main objective, just like any for-profit corporation or bank, is to operate a profitable banking business.

In this context, the BDC provides different types of financing to businesses in support of their long-term financial objectives.

Typically, businesses getting BDC financing will need to pay back the capital along with interest charges.

If you are looking for government grants or subsidies, BDC may not be your best option. 

Unlike banks, however, BDC does not offer traditional banking services like opening chequing accounts or savings accounts.

Furthermore, the Canadian Development Bank of Canada does not offer asset-based financing in the traditional sense of the word.

If they offer financing based on assets, those assets are linked directly to the business.

In addition, the company managers have a strong business plan showing the intended use of the assets and how the cash flow from its operations are going to fund ongoing business growth and operations.

Just like any other financial institution and banks, BDC does not receive government funding for them to loan out to businesses.

In essence, the funds that BDC borrows come from its money market borrowing and operations allowing it to raise the capital it needs to fund its loans.

BDC Services And Resources 

The Canadian Development Bank provides many useful services, tools, and guides to entrepreneurs.

Fundamentally, the BDC’s mission is to provide capital to small and medium businesses and provide advisory services to entrepreneurs.

With regards to business capital, the Business Development Bank offers:

  • Venture Capital financing
  • Growth and Transition Capital
  • Financing through Growth Equity Partners
  • Intellectual Property-Backed Financing 

As it relates to advisory services, it offers:

  • Advise on how to increase online presence and sales
  • Company restructuring and recovery 
  • Deal with public health guidelines 
  • Strategic planning 
  • Financial planning 
  • Management framework 
  • Human resource management 
  • Business model innovation 
  • Post-merger integration 
  • Sales and marketing advice 
  • Operational efficiency 
  • Certifications such as ISO, GFSI, HACCP

Entrepreneurs can find many useful guides, articles, and resources on BDC’s website providing them with tips, templates, explanations, and useful nuggets of business information.

BDC History And Numbers

Let’s look at some facts and data about the BDC to get a better sense of what they do.

  • BDC was established by the Act of Parliament as the Industrial Development Bank in 1944
  • It then became the Federal Business Development Bank in 1975
  • Finally, it adopted the Business Development Bank of Canada name as of 1995 further to the adoption of the Business Development Bank of Canada Act
  • BDC works with over 62,000 entrepreneurs across Canada 
  • BDC is the first financial institution in Canada to receive a B Corporation certification 
  • As of 2019, BDC was shown to have $30.6 billion in total assets 
  • As of 2019, it employed over 2,300 employees 
  • It has over 100 offices across Canada serving entrepreneurs 
  • They tend to have a focus on SMEs in the areas of manufacturing, exporting, innovation, and knowledge-based industries 

BDC Takeaways 

So, who is the Business Development Bank of Canada?

Let’s look at a summary of our findings.

Canadian Business Development Bank

  • The Business Development Bank of Canada (BDC) is a bank designed for entrepreneurs, particularly those operating a small to mid-sized businesses (SME)
  • BDC is the only bank in Canada devoted to entrepreneurs and the promotion of Canadian entrepreneurship 
  • The Business Development Bank does not offer traditional banking services or government grants and subsidies
  • It is a for-profit business engaged in commercial lending and financing to earn profits and operate its business 
Asset-based financing 
Bank of Canada 
Business incorporation
Business plan
Business start-up 
Export Development Canada 
Federal corporation
Government grants
Government subsidies
Letter of credit
Provincial corporation
Author
B Corporation 
Banking lawyer
Business lawyer
Commercial lawyer
Financing lawyer
Fixed interest rates 
Floating interest rates
Growth financing 
Incorporation Quebec 
Line of credit 
Repayment schedule 
Risk assessment 
Term financing 
Venture capitalist
Author

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