The Business Development Bank of Canada and Calgary-based fintech Woveo have launched a $10-million microlending program to help small-business owners across Canada, excluding Quebec, access loans of up to $25,000.
The initiative targets entrepreneurs who have difficulty obtaining conventional financing and aims to help them establish credit histories, strengthen their financial profiles and eventually qualify for larger loans from mainstream financial institutions.
The program combines small-dollar loans with guidance through community organizations, an approach intended to make financing more accessible to businesses that may not meet traditional lenders' requirements. It supports BDC's Community Banking initiative, which works with community and ecosystem partners to expand access to financing and business support.
Financing gap for small businesses
The launch comes as a smaller share of new Canadian business lending is going to small and medium-sized enterprises, according to figures cited in the announcement.
The Organisation for Economic Co-operation and Development's Financing SMEs and Entrepreneurs 2026 report found that the proportion of new Canadian business lending directed to small and medium-sized businesses fell to 5.8 per cent in 2024, down from 16 per cent in 2011.
Smaller businesses can face particular challenges securing modest amounts of capital because conventional underwriting processes can be costly and time-consuming relative to the size of a microloan, making such lending difficult for traditional financial institutions to provide efficiently.
The announcement also cited research associating business financing programs that include support services with higher business survival rates. Assisted small and medium-sized enterprises have been associated with survival rates of about 65 per cent, compared with 46 per cent for businesses that do not receive assistance.
Research cited in the release also indicates that entrepreneurs who obtain financing can more than double their average annual sales growth and nearly triple their annual job creation.
The new initiative is designed to combine access to capital with guidance intended to help entrepreneurs build sustainable businesses and improve their prospects of securing additional financing as their financial circumstances develop.
AI-assisted underwriting and community partnerships
Woveo's lending model combines community-based microlending practices with financial technology to assess applicants' creditworthiness. Its underwriting process incorporates real-time cash-flow information, credit bureau data, business-performance indicators and social collateral.
The company says the approach provides a broader assessment of an entrepreneur's financial position while drawing on relationships with local organizations to support borrowers and facilitate access to financing.
Jonah Chininga, Woveo's co-founder and chief executive officer, said barriers to financing remain a challenge for entrepreneurs whose experience or financial profiles may not be fully recognized by conventional lending systems.
"Small-business owners in Canada do not lack ambition or ability. Too often, they lack access," said Chininga. "As an entrepreneur who immigrated to Canada, I understand how difficult it can be to build a business when traditional systems do not fully recognize your experience, potential or financial profile. By combining cash-flow intelligence, credit data, AI-assisted underwriting and community accountability, we can make small-business lending more accessible and economically viable. Our initiative with BDC will help more entrepreneurs build sustainable businesses and create a pathway into the mainstream financial system."
Woveo said its existing community-based lending programs have facilitated more than 1,200 loans and achieved a repayment rate of 98 per cent.
The company is positioning the BDC initiative as an extension of that model, with the goal of helping borrowers build credit profiles that could support access to larger amounts of financing over time.
BDC seeks to expand access
For BDC, the partnership is part of an effort to use community relationships and technology to reach entrepreneurs who face barriers to conventional lending.
Adil Hassam, BDC's vice-president of Community Banking, said the initiative is intended to simplify the process of obtaining an initial business loan while connecting entrepreneurs with the support they need.
"Every successful entrepreneur starts somewhere, yet access to a first loan remains the most difficult loan to get," said Hassam. "By partnering with an innovative fintech like Woveo, we are leveraging technology to simplify and accelerate access to financing. By creating a faster and more efficient lending experience, BDC is making it easier for entrepreneurs to get the financing and support that they need to get their business started on the right foot."
The program is available to eligible entrepreneurs across Canada, with Quebec excluded. Loans are capped at $25,000, and the initiative's total lending commitment is $10 million.
Entrepreneurs can review the program and check their eligibility through Woveo's website at woveo.com/bdc.