How it works: Intended to provide additional liquidity support for Canadian businesses. The Co-Lending Program will bring the Business Development Bank of Canada (BDC) together with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements.
Department: Business Development Bank of Canada
Applicability: Differing maximum finance amounts based on business revenues. Eligible businesses may obtain incremental credit amounts up to $6.25 million. An 80% of financed amount provided by BDC and the remaining 20% by your financial institution. BDC’s portion of this program is up to $5 million maximum per loan. Eligible financial institutions will conduct the underwriting and manage the interface with their customers.
Funding: The potential for lending for this program will be $20 billion.
Effective Date & Length: Financial institutions are progressively rolling out program details starting April 24, 2020. Funding available until or before September 30, 2020.
How it works: Through the Business Credit Availability Program, Export Development Canada (EDC) is working with financial institutions to guarantee 80% of new operating credit and cash flow term loans of up to $6.25 million to small and medium-sized enterprises (SMEs). Funding is to be paid within a year.
Department: Export Development Canada
Funding: Up to $6.25 million.
Applicability: A guarantee to financial institutions is specifically for new operating lines of credit or new term loans to sustain operations in response to COVID-19. Small and medium-sized enterprises (SMEs) particularly vulnerable to the impacts of COVID-19 may access these credit products through financial institutions. Intended for rent, payroll, and operational costs. EDC fees related to this guarantee will be deferred for the first six months, giving some short-term relief to your business. Proceeds from your loan must be used to finance operations and cannot be used to repay or refinance existing debt.
Effective Date: Available through your financial institution.
How it works: This program will provide interest-free loans of up to $40 000 to small businesses and not-for-profits, to cover operating costs for a period where revenues have been temporarily reduced, due to economic impacts of COVID-19. Repaying the balance of the loan on or before December 31, 2022, will result in loan forgiveness of 25 percent (up to $10,000).
Department: Implemented by eligible financial institutions in cooperation with EDC.
Applicability: Small businesses and not-for-profits should contact their financial institution to apply for these loans. To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.
Funding: $25 billion available for interest-free loans of up to $40 000.
Effective Date & Length: Available through financial institutions.
How it works: A new program through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to help Canadian businesses obtain financing during the current period of significant uncertainty.
Intended to fill gaps in market access and leverage additional lending by private sector institutions. Businesses interested in accessing the BCAP should contact their financial institution, which will contact BDC and/or EDC where appropriate.
EDC: Effective March 24, 2020, EDC is stepping up to support all exporting companies by offering their bank a guarantee on loans of up to $5M so that companies can access more cash immediately. For more details, contact your financial institution.
BDC: Effective March 18, 2020, new relief measures for qualified businesses include:
● Working capital loans of up to $2 million with flexible repayment
● Flexible repayment terms, such as postponement of principal payments for up to 6 months, for existing BDC clients with total BDC loan commitment of $1 million or less;
● Reduced rates on new eligible loans;
● Additional details regarding Business Credit Availability Program (BCAP) measures, including industry-specific support, to be announced in the coming days.
Department: Export Development Canada (EDC) and the Business Development Bank of Canada (BDC)
Applicability: The BCAP will support access to financing for Canadian businesses in all sectors and regions. All credit-worthy businesses with viable business models whose activities fall within the mandate of either BDC and/or EDC are eligible to benefit from BCAP.
The objective of the Business Credit Availability Program is to improve access to financing for credit-worthy Canadian businesses with viable business models whose access to financing would otherwise be restricted.
Funding Available: EDC and BDC will provide more than $10 billion in direct lending and other types of financial support at market rates to businesses with viable business models whose access to financing would otherwise be restricted.
Effective Date & Length: BCAP is currently available.
The City of Cornwall launched the Cornwall Small Business Emergency Support Loan program. Qualifying businesses are eligible for an interest-free loan of up to $5,000 to offset the effects of the COVID-19 crisis. The Small Business Emergency Support Loan program provides a loan in two parts: $2,500 to provide immediate emergency support, and further assistance of up to $2,500 to offset costs incurred in helping the business transition to a more versatile business model. The loan is interest-free with payments not required until December 31, 2022. Up to $1,000 of the loan will be forgivable if $4,000 is fully repaid on or before December 31, 2022. The program is funded under the City of Cornwall’s Community Improvement Program and funding is capped at $500,000. Priority consideration will be given to businesses that can demonstrate clear and substantial hardship resulting from a disruption of business operations as a result of the COVID-19 crisis.
The Town of Innisfil announced that local small business financing of up to $10,000 is available to business owners in the following areas: Innisfil, Bradford West Gwillimbury, New Tecumseth, Adjala-Tosorontio, and Essa. The Town of Innisfil is also surveying business owners on their immediate and future effects of the pandemic, to get a sense of future supports that will be needed.
The City of Montreal has created an emergency fund of $5 million to help businesses in areas such as tourism, arts and culture. Details of how to apply for these subsidies are still unclear. As well, any businesses that have taken loans from the City of Montreal will be entitled to a six-month moratorium on their repayment, with the City absorbing any interest during that period.