On March 27, 2020, details of the Business Credit Availability Program were announced. It provides support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Both organizations will work with private lenders to extend credit for businesses. In many cases, financial institutions will reach out to their clients with details and the specific application process. In general, three programs are available:
- Canada Emergency Business Account (CEBA) – this provides interest-free loans of up to $40,000 to small businesses and not-for-profits to help cover operating costs during a period where revenues have been temporarily reduced. To qualify, organizations will need to demonstrate they paid between $20,000 and $1.5 million in total payroll in 2019. 25% of the loan (up to $10,000) will be forgiven when the loan is repaid before or on December 31, 2022. Applications through the borrower’s financial institution should be available on April 9, 2020. Here is a great video with more details on the account.
- Loan guarantee for small and medium-sized enterprises – EDC is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to small and medium enterprises.
- Co-lending program for small and medium-sized enterprises – BDC is working with financial institutions to co-lend term loans to small and medium enterprises for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.
Interested businesses should work with their current financial institutions.
The preceding information is for educational purposes only. As it is impossible to include all situations, circumstances and exceptions in a blog such as this, a further review should be done by a qualified professional.
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