BARRHEAD - Community Futures Yellowhead East (CFYE) and its clients weathered the economic storm brought about by the pandemic and then weather disasters better than expected.
That is what CFYE executive director Michelle Jones, appearing via teleconference, told Town of Barrhead councillors during their April 23 meeting.
Jones is making the rounds updating the municipal councils the organization serves, noting that she has already addressed the County of Barrhead and Mayerthorpe councils.
Community Futures is a not-for-profit, community-driven organization that provides a wide range of small business services and business management tools for people wanting to start or expand an existing business and those looking to sell or buy a business. It was founded in 1986 and is funded by the federal government in Western Canada by Western Economic Diversification (now PrairiesCan). The Yellowhead East branch is based in Whitecourt and is one of 27 in Alberta. It also serves Alberta Beach, the Barrhead municipalities, Fox Creek, Lac Ste. Anne County, Swan Hills, Onoway, and Woodlands County.
"Rural economic diversification is at the core of what we do," Jones explained. "Working with our community leaders and key stakeholders to create regional economic sustainability by implementing projects that provide value-added activity to support job creation through business startups and expansion, as well as retention and attraction."
She said CFYE does this by offering strategic planning, technical services and loans to small — to medium-sized businesses.
Jones added over the last year, much of the organization's efforts focused on economic recovery, first from the ongoing impact of the pandemic, followed by flooding, especially in Whitecourt and Woodlands County and wildfires, which forced the prolonged evacuation of Swan Hills.
"Several of our small business clients were definitely affected by this," she said.
However, Jones said that despite those challenges, CFYE had several successes.
Expressly, she referred to the renewal of Community Future's Digital Economy Program, which helps businesses expand and incorporate online practices (adding later that CFYE hopes to expand the program to include not-for-profit organizations), and its economic and financial investment portfolio performed better than they anticipated.
Jones said that in the last year, CFYE has approved about $755,900 out of its general investment loans fund, of which roughly $521,000 is still outstanding.
"This equates to 17 full-time positions, 10 part-time positions, and new or expanding positions," she said.
Most of the general investment loans were to businesses in the food and accommodation sector at seven, while three loans were to companies in the energy industry, with one each going to businesses in the transportation, professional tech or arts and entertainment industries.
Jones stated that most loans went to businesses in Whitecourt, three went to companies in Onoway, and three other loans to business owners in Mayerthorpe, Swan Hills and the County of Barrhead.
Investing in women entrepreneurs
She also noted that CFYE also participated in the province's Capital Growth Initiative.
"[The government] provided each Community Futures approximately $100,000 to provide loans to female entrepreneurs," Jones said, adding that she believes the province decided to target the fund to women because they were disproportionately negatively impacted by the pandemic. "Many women had to leave their jobs or businesses and work from home to care for their children and oversee their schooling."
She added that the province gave Community Futures offices the option of providing successful applicants loans of up to $75,000, but the CFYE board opted to create 10-$10,000 loans, which "were given out in a minimal amount of time."
Jones added that because they successfully gave out their original allotment, the province gave them an additional $30,000, which they, again, helped three additional women entrepreneurs with $10,000 loans.
She said the prominent benefit of these loans is that a 25 per cent portion is forgivable if the borrower pays 75 per cent of the loan within five years.
"The payments are quite reasonable, so I don't anticipate many will have difficulty paying it back," Jones said.
As the women repay the loan, CFYE will make similar loans available. "Eventually, the fund will dry up, but we look forward to having some funds to re-invest in women entrepreneurs in the region," she said.
Youth loan program
Jones also told councillors about CFYE's Youth Loan program, which they started last year through a $100,000 contribution shared among its 10 municipal partners.
Up to $15,000 in unsecured, interest-free loans are available to youths between 15 and 34 years old through the program.
So far, CFYE has approved two loans through the program, the latest being to a County of Barrhead business, Alberta HempWorks — a licensed hemp processor and decortication facility growing and selling value-added hemp materials.
Regional Relief Recovery Fund (RRRF) loans.
The federal government created the $2-billion RRRF loan fund to help small and medium-sized businesses negatively impacted by the pandemic survive.
Most businesses accessed this fund through their bank and applied for $40,000 or $60,000 interest-free, partially forgivable loans.
However, many businesses that could not qualify for the loan through their bank accessed the fund through Community Future offices. For businesses to be eligible for a 25 per cent loan forgiveness, they needed to pay back the bulk of the loan by Jan. 31, 2024, or March 31, if they applied for refinancing. The CFYE received just over $1 million by the deadline from those who had paid in full. Earlier in the meeting Jones noted the CFYE dispatched over $2.5 million in RRRF loans.
Those who did not pay the required 75 per cent by the deadline must make monthly payments on the total amount of their RRRF loan.
Jones said about a dozen CFYE clients are on a payment schedule, of which eight are having difficulty meeting their obligations.
"We are working with them to see if they can make some sort of payment," she said. "So far, we have been successful with a few, but I anticipate there will be a few that will continue to struggle, but the amount has been far better than we anticipated."
The majority of RRRF loans through the CFYE were from companies providing services to the energy industry, accounting for more than $800,000. Retail and trades followed at just short of $600,000. In contrast, the real estate, rental, and leasing industries accounted for about $200,000, with the bulk of the loans coming from businesses in the Whitecourt region.
Entrepreneurs with Disabilities program
The last area Jones discussed was their Entrepreneurs with Disabilities program. She said while it is a program that CFYE has offered for several years, recently, they've expanded it to include individuals who have been diagnosed with Adult attention-deficit/hyperactivity disorder (ADHD) and other mental disorders.
Coun. Dave Sawatzky was particularly interested in CFYE's youth program, asking if they had much uptick from area schools.
Jones said that, unfortunately, they have not had the opportunity to get into schools, except for Whitecourt's Percy Baxter School, which serves Grade 4 to 8 students.
"We do a little bit of youth entrepreneurship training with them and a market with them, and I would like to see more of this in our communities," she said.
Jones also admitted that due to staffing and the fact that the CFYE office is in Whitecourt, some outlying communities, such as Barrhead, are underserved, but they are working hard to overcome that.
