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AIOC’s Loan guarantees help Indigenous groups access capital that might otherwise be out of reach. With a loan guarantee in place, First Nation and Métis groups can get loans easier, and at preferred rates – allowing them to become equity owners in large-scale revenue-creating projects.

Before a bank or lending institution will provide an equity loan, they require either collateral or a loan guarantee to cover them in the event of a default. The challenge for Indigenous groups is that traditional forms of collateral (such as Crown land or assets) cannot be used, due to restrictions in the Indian Act.

The Government of Alberta (GoA) recognized this as an obstacle to Indigenous groups participating as equal partners in the economy. They established the Alberta Indigenous Opportunities Corporation as a “risk sharing” mechanism. This gives lenders the assurance required to extend credit to First Nation and Métis groups – by offering government back-stopped loan guarantees.

A guaranteed loan means that in the event of a default, the lender will look to the guarantor (in this case AIOC) to pay for the loan repayments agreed to by the borrower (the Indigenous group(s)).

AIOC’s loan guarantee program makes it easier for Indigenous groups to access capital through loans. This makes financing more affordable. It can also improve lending terms.

Note: The AIOC loan guarantee program is exclusively available to Indigenous Nations and communities and Nation-owned, or community-owned business entities administered by an elected Council. It is not available to private, Indigenous-owned businesses.

Here is a look at how it works:

Partnership Read more Revenue i Indigenous Groups Partnering Companies Read more Read more Loan Guarantee Read more Business Ventures Infrastructure Investments Cultural Supports Economic Growth Revenue Revenue i i Impacts for Indigenous Groups Read more