Local investment fund

The Fonds Locaux d'Investissement aims to stimulate local entrepreneurship by providing financial support for business startup, growth, transformation, and succession projects in Quebec. Eligible projects can receive various forms of funding including loans, guarantees, and participative loans, with a maximum support amount of $150,000 per year.

The Fonds Locaux d'Investissement (FLI) is an essential financial aid program conceived to boost local entrepreneurship in Quebec. This comprehensive guide delves into the objectives, eligibility criteria, types of projects supported, eligible expenses, application process, and the potential financial assistance entrepreneurs can expect. By the end of this detailed guide, you will have an in-depth understanding of the FLI program and how it can catalyze your business venture.

The primary goal of the FLI is to foster local entrepreneurship by providing businesses with easier access to capital, thereby accelerating the realization of their projects. These projects may include: - Startup of new enterprises - Improvement and transformation of existing businesses - Business growth and expansion initiatives - Entrepreneurial succession and business takeovers By facilitating these endeavors, the FLI not only stimulates local economic development but also supports sustainable business practices and technological advancements.

To qualify for the FLI, businesses must meet specific eligibility requirements. This section will cover the types of eligible businesses, conditions they must satisfy, and ineligible entities. Eligible Businesses: - For-profit enterprises legally constituted under Quebec or Canadian laws. - Collective enterprises (cooperatives and non-profit organizations with commercial activities). Conditions: - The organization must be legally constituted and operational in Quebec regardless of its constitutive law. - Applicants should not be or utilize services from contractors listed in the Register of enterprises ineligible for public contracts (RENA). - Compliance with financial aid terms from the Quebec government or Municipal Regional County (MRC) for at least two years prior is mandatory. - The entity should not be a state-owned company or one controlled directly by a government entity. - The applicant must not be bankrupt or insolvent. - The project should not involve unethical practices or anything that could compromise the integrity of the Quebec government. - Eligibility as per the investment policy of the MRC. Ineligible Entities: - State-owned enterprises or those controlled by municipal, provincial, or federal governments. - Businesses in debt, bankrupt, or involving unethical practices.

The FLI covers a wide array of business activities under four primary categories. Each category has specific conditions and allowable expenditures. 1. Startup Projects: - Businesses must have been operational for less than two years and still in the commercialization phase. - Financial aid supports the initiation of commercial and operational activities. 2. Improvement and Transformation Projects: - Businesses should be active in Quebec for at least one year. - Supported projects can aim to enhance productivity, accelerate digital transformation, or implement sustainable organizational practices. 3. Growth and Expansion Projects: - Must be in business in Quebec for no less than two years. - Financial aid facilitates business growth and realization of expansion projects. 4. Entrepreneurial Succession Projects: - Entrepreneurs or groups aiming to acquire at least 25% of an existing business's value or assets for succession purposes. - Simple purchase of business shares or assets not aimed at business continuity and leadership transition is not eligible.

The FLI allows several types of expenses, categorized based on the project types listed above. Startup, Improvement, Transformation, and Expansion Projects: - Additional working capital needs for up to two years necessary for project realization. - Capital expenditures such as the acquisition of technology, land, buildings, equipment, machinery, and materials. - Preliminary costs including feasibility analysis, external audits, and impact studies. - Implementation expenses such as the acquisition of technologies, construction, renovations, and facility enhancements. Entrepreneurial Succession Projects: - Acquisition costs of business shares or assets. - Transaction-related expenses and leadership transition costs. Non-Eligible Expenses: - Expenses incurred before the application submission. - Debt servicing, upcoming loan repayments, or any capital loss replacement. - Internal transactions between linked businesses or partners. - Research and development expenditures. - Regular operational costs of the business. - Applicable sales taxes in Quebec.

The FLI is managed by MRCs, and the policies may differ in alignment with each MRC's investment strategies. The general process involves the following steps: 1. **Contact Information:** Reach out to the respective MRC, municipal office, or economic development organization responsible for FLI in your area. List of MRCs and Development Organizations: - Abitibi-Témiscamingue: Abitibi, Abitibi-Ouest, La Vallée-de-l'Or, Rouyn-Noranda, Témiscamingue. - Bas-Saint-Laurent: Kamouraska, La Matanie, La Matapédia, La Mitis, Les Basques, Rimouski-Neigette, Rivière-du-Loup, Témiscouata. - [Further down the list under Montérégie, Saguenay–Lac-Saint-Jean, and other regions in Quebec.] 2. **Selection Process:** The MRC oversees the evaluation of financial aid applications, encompassing eligibility, analysis, and decision-making processes.

The FLI provides various forms of financial assistance, including: - Loans - Participative loans - Loan guarantees - Cautioning obligations - Equity stakes in the business Key Points: - The maximum support rate is up to 50% of eligible expenses for for-profit businesses and 80% for social economy enterprises. - Overall government aid cannot exceed 50% of the total project cost, except for social economy projects that can receive up to 80% financial assistance. - The maximum financial support is $150,000 over twelve months, and higher amounts may be approved for select projects at the Quebec government's discretion. - Each investment project requires a minimum equity injection from the promoters or the business, equivalent to 15% of the project’s total cost.

The Fonds Locaux d'Investissement is an invaluable financial support mechanism designed to encourage and sustain local entrepreneurship across Quebec. By providing accessible funding options tailored to startup ventures, business improvement, growth projects, and entrepreneurial succession, the FLI ensures that businesses at various stages can realize their potential. Reap the benefits of this program by understanding its offerings, preparing a robust application, and engaging with your local MRC to propel your business prospects.