Thank you, Mr. Chair.
Good morning and happy global entrepreneurship week. My name is Julia Deans. I'm the CEO of Futurpreneur Canada which until May was known as the Canadian Youth Business Foundation or the Fondation Canadienne des Jeunes Entrepreneurs. We're the only national not-for-profit organization that's helped close to 6,000 Canadians, 18 to 39, launch businesses across the country. I'm very happy to have the opportunity to speak to you today in support of a proposed amendment in division 12 of Bill C-43.
This amendment will expand BDC's ability to support young entrepreneurs through not-for-profit organizations like ours. We have been co-funding with BDC for young entrepreneurs since 2008. With one application, a young entrepreneur can obtain a loan of up to $15,000 from Futurpreneur Canada and a further loan of up to $30,000 from the BDC. That's up to $45,000 collateral free with just one application through Futurpreneur Canada.
We work really hard to make it easy for young entrepreneurs to work with us. We use as many of our resources as possible for the front-line programs and services we provide to young entrepreneurs. Our admin costs are about 7% of our budget.
The way it works is this. Futurpreneur Canada manages the initial relationship with the young entrepreneur applying for financing and we conduct the due diligence. BDC relies on our strong track record and our sound adjudication process when it looks at applications from young entrepreneurs who also would like loans from BDC.
Since 2008, we have had close to 1,700 young people take advantage of BDC's co-funding. Last year, 44% of our young entrepreneurs also secured co-funding from BDC, so it's on the rise.
I should note that since October, BDC has also provided all of the financing, that's up to $45,000, for 34- to 39-year-olds. They might not strike you as young people but they are and they're often coming to entrepreneurship for the first time at that point. This is a really growing group.
Through this co-funding arrangement, BDC is able to help young entrepreneurs who are considered too risky to get mainstream financing. They're also people who are very hard for BDC to reach and who need a lot of extra support when they're starting their businesses.
The proposed amendment won't change this co-funding arrangement at all. It will, however, make it possible for us to help start more new businesses with less money from government. Right now, we raise money from governments and other sources to provide loans and services to young entrepreneurs. In the future, we plan to secure our loan capital from a private bank. This is a new relationship and so to start with, the private bank, while they get to know us, requires a guarantee. The proposed amendment will allow BDC to provide this guarantee. Given our loan repayment track record, there's a very low risk of the guarantee ever being called upon and BDC will price the guarantee accordingly.
This amendment will mean that the money we raise to provide services to young entrepreneurs will be leveraged to raise private sector money for the loan capital. This could be up to $50 million of new money from the private sector going into the hands of young entrepreneurs in the next five years. It will also mean a reduced ask of governments and improve our future sustainability and our capacity to help grow more successful businesses in the future.
Thank you.