Jun 26: WD/Vancity Addresses Small Business...

Burnaby, June 26, 2000 - Western Economic Diversification Canada (WD) and Vancouver City Savings Credit Union (Vancity) will work together to provide much needed funding to small and medium-sized businesses looking to grow.

Vancity, in cooperation with WD, will establish the $20 million Growth Capital Loan Program to foster growth and create jobs, and provide support for business expansion or change. Loan approval is based primarily on character and credit history, rather than on collateral. Vancity will make investments ranging from $50,000 to $500,000 to qualified clients. WD will support the program with a $3 million loan loss reserve.

With changes in technologies, markets and increased competition, companies must have access to capital that will help them evolve in this rapidly changing environment. The growth capital fund will help those businesses not necessarily associated with the new economy - more traditional businesses that do not have access to venture capital.

"Statistics suggest small business is Canada's fastest growing trend and the key to job creation in this country, but the statistics don't tell the whole story. Access to growth capital is a major barrier facing many entrepreneurial Canadians," said the Honourable Ron J. Duhamel, Secretary of State Western Economic Diversification Canada and Francophonie. "I am pleased that through our partnership with Vancity, entrepreneurs in British Columbia have the opportunity to realize that support. Businesses will grow, jobs will be created and the economy will benefit."

"We want to work with small- and medium-sized businesses in our communities to help them thrive and prosper," said Vancity CEO Dave Mowat. "With the support of the federal government, through Western Economic Diversification, we'll be able to help even more entrepreneurs in B.C. gain access to growth capital than ever before."

Applicants under the loan program will be screened by WD or Vancity. Projects which meet program criteria will referred to a loans officer at Vancity. Both parties will provide business planning assistance. Due diligence assessment and ongoing support will be carried out by Vancity, and all final loan decisions will be made by Vancity, as the lending institution.

Western Economic Diversification's objective is to encourage new economic activity in Western Canada, to help create new jobs for western Canadians and to help businesses and communities adapt to, and take advantage of, changing technologies and markets. In pursuit of this objective, WD provides a wide range of services focused on small and medium-sized enterprises, including information on business planning and development, export and trade development, access to financing and selling to governments.

Vancity serves as a catalyst for the self-reliance of its membership and the community. Vancity is Canada's largest credit union, with $6.4 billion in assets, 262,000 members, and 39 branches throughout Greater Vancouver, the Fraser Valley and Victoria. Vancity owns Citizens Bank of Canada, serving members across the country by telephone, ATM, and the Internet. Both Vancity and Citizens Bank are guided by a commitment to corporate social responsibility.

Eligible projects for growth capital financing through Vancity include working capital to support growth initiatives, acquisitions, management buy-outs, on-going R&D, marketing expenses, and specialized equipment purchases. To qualify, companies will have a minimum of one year's results which indicate positive cash flow from operations sufficient to meet all projected debt service obligations.