April 8, 1999

To: Economic Development Committee

From:Joe Halstead, Commissioner of Economic Development, Culture and Tourism

Subject: Young Entrepreneurs Program

Purpose:

To provide an overview of the Young Entrepreneurs Program and training provided by Toronto Small Business Centres.

Recommendations:

It is recommended that:

1.this report be received for information.

Council Reference/Background/History:

In December 1998, the Young Entrepreneurs Program (YEP) and the Royal Bank developed a Partnership where the young entrepreneurs of Ontario can obtain a business loan and valuable guidance on starting a new business.

The YEP program is a training and financing program for young people 18-29 who are interested in starting and operating a small business. The program provides a loan up to $7,500 and offers a mandatory training program to young entrepreneurs before applying for the loan.

The training workshops are conducted by numerous Self-Help/Business Enterprise Centres all across Ontario. The City of Toronto's Economic Development Division will be conducting the training workshops throughout the City at the four Small Business locations. Also promotional material and applications on the program are available at all Centres.

The following are some program guidelines and regulations:

-Applicants must be 18-29 years of age, not attending school on a full time basis and be eligible to work in Ontario.

-Training workshop ($125) is mandatory before applying for the YEP loan. Completion of the workshop does not guarantee approval of loan.

-Businesses that are active or inactive and registered for more than (3) three months are not considered a new business and are not eligible to receive the YEP loan.

-Must make an equity contribution of at least 30% of the amount applied for up to ($7,500). Equity contribution may be cash or in kind. Interest charged on the loan will be calculated at Royal Bank Prime +2%.

-The YEP loan may be used for any cost associated with the start-up of a new business (i.e. advertising, promotions, leasing cost, fixed assets, insurance etc.).

The following are some restrictions on the use of the loan:

-The loan cannot be used to buy into an existing business.

-The loan cannot be used to refinance purchases already made into the business.

-Business that are ineligible to receive the YEP loan:

-Franchise

-Multi-level marketing system

-Commissioned salesperson

-Adult entertainment operations

-1-900 number service

-Entertainment ventures (bands or dance clubs)

-Professional practices by doctors, dentist, lawyers, accountants are not eligible.

Conclusions:

As of date, the YEP program has trained over 680 youths under the mandatory workshop and have approved over 110 applications.

Contact Names:

Vikas JainBrenda Librecz

Small Business ConsultantManaging Director

396-5243397-4700

Joe Halstead

Commissioner, Economic Development, Culture and Tourism