Rural Entrepreneur Assistance is designed to assist rural businesses in accessing financing. It provides loan guarantees to participating financial institutions for loans to new or expanding, small and home-based businesses in rural Manitoba.
Access to capital is vital to business, and small and home-based businesses are especially important to the growth of our rural communities. The Rural Entrepreneur Assistance (REA) program provides funds for business starts, expansion or the purchase of existing businesses for small, non-agricultural businesses in rural Manitoba by providing loan guarantees to financial institutions. In this way, REA contributes to strong communities and jobs for rural Manitobans.
REA provides a guarantee on individual business loans to assist with start-up, expansion costs or the purchase of existing businesses. REA guarantees up to 80% of the first $200,000 borrowed.
- The program is available to businesses located in Manitoba, outside of Winnipeg.
- Small businesses with $2 million or less in annual income/sales at time of application or in the first year of operation are eligible
- Loans are made to owners/operators and may be used for the purchase of fixed assets, inventory and/or working capital. The loan cannot be used to pay existing debts of the company or any individual, nor can loans be transferred.
- Cooperatives and partnerships are eligible for the REA program.
- Businesses not eligible include: insurance, real estate investing, financial, consulting, brokerage services, restaurants, those engaged in primary harvesting of resources, primary agriculture, or those intending only to renovate or make cosmetic changes to buildings.
Terms and Conditions
- The minimum REA-eligible loan is $10,000, with no maximum. REA guarantees are capped at 80% of the first $200,000 borrowed; any loan exceeding $200,000 will have the guarantee calculated as a percentage of the outstanding principal loan amount.
- Loan amortizations beyond 10 years are permitted, however the REA guarantee is restricted to the first 10 years (maximum).
- The interest rate charged by the lender cannot exceed the commercial prime rate plus 2.5%.
- If a fixed rate is preferred, the rate is negotiated with the borrower and lender.
- Applicants must contribute 20% of the total project cost in the form of cash, land, buildings, equipment, inventory and/or assets that would be used in the business.
How to Apply
- Applicants must contact a participating lender or the REA program specialist toll-free at 1-800-282-8069 (ext. 2180) or in Hedingley at (204) 945-2180.
- An application form along with a business plan is required.
- Applicants must register for and attend a 3-day business workshop.
REA Program Administrator
Manitoba Agricultural Services Corporation
1-5290 Monterey Road
Headingley, Manitoba R4H 1J9
Toll Free: 1-800-282-8069 (ext. 2180)