ANNUAL REPORT For the Year End March 31, 2018
The year April 1, 2017 to March 31, 2018 ended with an Operating Account deficit of $4,819. The Board used $146,500 interest earnings from Investment to supplement the deficit this year. $222,318 was received in operating income from ACOA.
The corporation had budgeted $314,173 revenues plus the need to use $ 163,153 interest from investment earnings for a total of 477,326. Budgeted expenses were $477,326. Actual revenues achieved were $303,846 plus a transfer of $146,500 from investment earnings , totalling operating revenue $ 450,346. Actual interest from earnings used was $16,653 less than budgeted. Revenues exclusive of use of investment earnings were $10,327 less than budgeted due in particular to the loss of a sub-tenant early in the year. Revenues sourced from Employment Nova Scotia for the year included $18,129 for providing the Self-Employment Benefits program and $12,000 from the START new employee subsidy program. Actual expenses of $455,154 were $22,173 under budget due mainly to staff changes.
The corporation did 2 other extra contracts during 2017-2018:
- Entrepreneurial Training Fund; partnered with Atlantic Association CBDC/ACOA
- Consulting Advisory Services Program; partnered with NS association CBDC
South Shore Opportunities invested $8,420 in 7 businesses who took individual training in a business management skills. In 2017-2018, via the Entrepreneurial Training Program, people gain a great deal from individualized learning. This year, 5 of the 7 businesses used the training to learn individualized bookkeeping on a variety of software. 1 business gained specialized marketing skills and a group of 7 young artists learned many business management skills through a training partnership with Youth Art Connection and Art Happening.
South Shore Opportunities approved only 1 Consulting Advisory Services contract. The Consulting Advisory Services program helped the existing business determine the correct target market.
South Shore Opportunities had 117 new business client interviews, 34 from Queens Co and 83 from Lunenburg Co. Similar to what was experienced in 2016-2017, Queens County had approximately half the new inquiries compared to its previous history while Lunenburg County new inquiries remained much stronger with the number of new inquiries similar to previous years. As a result, total new inquiries were, once again this year, below the historical average of 150 new inquiries per year.
As a result of these new inquiries, South Shore Opportunities provided assistance with business plans and other technical assistance and business counselling sessions. The majority of new clients came from existing clients. In 2018 the Atlantic Association cbdc website was a strong referral source. The banks continue to be a good source of referrals.
South Shore Opportunities originally received $2,396,890 for community investment from various Federal Government sources (Employment Immigration, Human Resource Development Canada, Service Canada and ACOA) between start-up 1992 and 1998. The organization has committed $19,662,851 to March 31, 2018.
The year end March 31, 2018 saw 23 formal requests for investment from the General Investment Fund, 8 for Queens Co. and 15 for Lunenburg Co. Similar to the experience with new inquiries, Queens requests for financing were about half its historical average while Lunenburg remained similar to earlier years.
The request for investment totalled $1,487,550 which is down $ 431,285, from 2016-2017 application. Of note, 2016-2017 was third only to 1997-98 and 1998-1999 for the amount of dollars included in the organizations’ history of application requests.
During this fiscal year South Shore Opportunities committed 87% of the requests, committing $ 1,037,550, 20 loans (19 of which were used), down 5 loans and $335,885 loans committed compared to 2016-2017. Of note, 2016-2017 the number of loans approved was 39% higher than the 26 year average number of loans approved (20.76) and 2016-2017 was also the most loan dollars approved, $1,679,835, in the organization’s 26 year history. 2017-2018 was an average year.
The current year investment was partially used to potentially create 18 FTE jobs and maintain 66 FTE jobs, continuing the trend that the investment impacts maintaining existing jobs rather than creating new jobs.
Write-Offs and Allowance for Doubtful Accounts
Write-offs to the general Investment Fund during this fiscal year totalled $162,205.67 covering 4 loans for 4 businesses. Historical total write-offs with subsequent recoveries means the rate of write-offs net of recoveries, $2,561,432.98/ $19,662.851.13 to March 31, 2018 is 13.0% of commitments, since inception.
Following analysis of the loan portfolio and individual loans, the organization chose to make no increases to the Allowance for Doubtful Accounts, leaving the balance at year end at $659,078.90 which is a conservative 22.5% of the outstanding loan portfolio.
The combined Investment Fund completed the year with $2,923,548.12 $3,080,139.07Million Loans Receivable, covering 68 loans, after write-offs. This is down $156,590 and 6 loans from 2106-2017. At March 31, 2017 there was $995,664 available for investment.
Referencing Community Futures of Tomorrow funding formula, indicates a 1.5% operating contract penalty if investment funds loaned to the community or ACCBIF are less than 70%. Based on disbursed figures, this organization ended the year March 31, 2018 with 73.7% utilization down slightly from 74.9% utilization March 31, 2017.
GOVERNANCE The Board of Directors continues to both advertise publicly and utilize networks to continually seek new members of the Board. The Board remains committed to seeking a broad range of geographic and industry business expertise to maintain the important access to capital for small business in the community of Queens and Lunenburg counties.
The organization is currently seeking potential board members from Lunenburg County and is particularly interested in attracting young entrepreneurs at the moment.