Recent changes will make it easier for New Brunswick businesses to access a community investment program that helps them raise capital from New Brunswick investors.
The Financial and Consumer Services Commission (FCNB) recently updated its local rule and added supporting resources to its website to improve the application process for the community economic development corporation and cooperative (CEDC) program, with the goal of seeing more CEDCs operating in the province.
Three CEDCs have used the program for capital raising in New Brunswick since its launch in 2016.
“The CEDC program can be a powerful capital raising tool to harness investment dollars from New Brunswickers to create jobs for New Brunswickers,” said To-Linh Huynh, Executive Director of Securities for FCNB.
The CEDC program is a joint undertaking between FCNB and the New Brunswick Department of Finance and Treasury Board. It provides benefits to both businesses trying to raise capital and New Brunswickers wanting to invest in their local communities.
The program allows businesses to sell shares to investors within a defined community to raise up to $3 million without going through the expense and regulatory burden of being registered with FCNB and preparing a prospectus document for investors – required for more traditional capital raising options. The funds raised are controlled by a local group of directors and officers of the CEDC.
The program also offers tax advantages to eligible investors under the Province of New Brunswick’s Small Business Investor Tax Credit Act.
“For the individual investor,” Huynh said, “it’s a way for them to invest in their communities and see their communities grow, while benefiting from a tax credit from the Province of New Brunswick.”
FCNB has launched new resources to help entrepreneurs through the newly streamlined application process. They include a new fillable offering document form, two instructional videos, sample offering documents and other materials found at FCNB.ca. The videos will walk entrepreneurs through the CEDC process and provide step-by-step instructions on how to fill out key areas of an offering document.
FCNB will also be hosting an information session, with simultaneous interpretation, on November 17 to help New Brunswick entrepreneurs and other stakeholders understand the CEDC program and its recent improvements. Subscribe here for Capital Raising Events and Notices to learn more about the upcoming information session.
“In addition, our staff are available to answer any questions businesses may have about the application process,” Huynh said.
“The CEDC program continues our work in fostering fair and efficient capital markets with the aim of strengthening New Brunswick’s financial and social economies.”