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Support for Businesses - Financial Support, Loans and Access to Credit

Export Development Canada, Business Development Canada and other federal government entities are working with Canadian financial institutions to implement programs that focus on securing loans and providing financial support to employers across Canada during COVID-19. These measures include interest-free loans, loan guarantees, commercial rent assistance and more. The following provides a brief summary of these government programs, including details relating to eligibility, how to apply and general terms and conditions, as applicable. We will endeavour to update this page on a daily basis. However, for a complete and up to date description, please consult the applicable program webpage. Should you have any questions, please feel free to reach out to a Goodmans lawyer. Programs include:


 

Business Credit Availability Program (“BCAP”)

Program Overview

  • The BCAP provides support through four programs (below) to individual business through the Business Development Bank of Canada (“BDC”) and Export Development Canada (“EDC”), along with private sector lenders. The BCAP is aimed at businesses in sectors such as oil and gas, air transportation, and tourism.
  • Businesses may be eligible (refer to eligibility criteria per program below) to participate in the following four BCAP programs:
  1. EDC Guarantee for Small or Medium-sized Enterprises (“SMEs”)
  2. BDC Co-Lending Program for SMEs
  3. BDC’s Mid-Market Financing Program
  4. EDC’s Mid-Market Guarantee and Financing Program
     

Note: Eligible businesses may access multiple government programs (i.e.: BDC Co-Lending Program for SMEs, EDC Guarantee for SMEs and CEBA).

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1. BCAP: EDC Guarantee for SME

Program Overview

  • EDC will provide an 80% guarantee  to an eligible financial institution  in respect of new operating lines of credit and cash flow term loans for an eligible SME of up to $6.25 million.
  • At a minimum, the EDC Guarantee for SME will be subject to the conditions listed here.
  • The program is available to SME until September 30, 2020.

Eligibility

  • The EDC Guarantee for SME will be open to both exporting and non-exporting SME Canadian businesses that are financially viable and were in good standing as of March 1, 2020. A business’s eligibility for the EDC Guarantee will also be subject to business's financial institution’s underwriting criteria.
  • The EDC Guarantee for SME program is not available to certain entities listed here.

How to Apply

  • The EDC Guarantee for SME program is now open for applications. To apply, businesses should contact their financial institutions and inquire about the program.

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2. BCAP: BDC Co-Lending Program for SME

Program Overview

  • BDC and various financial institutions are working together to co-lend term loans to SME for their operational cash flow requirements (including regularly scheduled principal and interest payments on existing debt). Under the program, BDC provides 80% of the loan and the financial institution provides 20%. 
  • The financing amount offered (ranging from $312,500 to $12.5 million) to eligible SME differs based on annual business revenue criteria and are subject to conditions the conditions found here.
  • The program is open and will be available until September 30, 2020.

Eligibility

  • The BDC Co-Lending Program for SME is available to Canadian SME businesses that have been financially viable and were in good standing as of March 1, 2020.
  • A businesses eligibility for the BDC Co-Lending Program will also be subject to the businesses’ financial institution’s underwriting criteria.

How to Apply

  • The BDC Co-Lending program is now open for applications. To apply, businesses should contact their financial institutions and inquire about the program.

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3. BCAP: BDC's Mid-Market Financing Program

Program Overview

  • This program will provide commercial loans to medium sized businesses whose credit needs exceed what is available through the EDC Guarantee and the BDC Co-Lending programs for SMEs described above. Under the program, loans will range between $12.5 and $60 million.

Eligibility

  • Comprehensive details have yet to be released. However, the federal government has indicated that qualifying companies are anticipated to have annual revenues in excess of $100 million and must have been financially stable and viable prior to the current economic downturn.

How to Apply

  • Applications have not yet opened.

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4. BCAP: EDC's Mid-Market Guarantee and Financing Program

Program Overview

  • This program will bring liquidity to companies through new operating credit and cash-flow loans guaranteed by EDC and Canadian financial institutions. Under the program, EDC and financial institutions will guarantee 75% of new operating credit and cash-flow loans ranging in size from $16.75 million to $80 million.

Eligibility

  • Comprehensive details have yet to be released. This program is available to exporters, international investors and business that sell their products or services within Canada, that will usually have revenues between $50 and $300 million.

How to Apply

  • Applications have not yet opened.

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Canada Emergency Business Account
("CEBA")

Program Overview

  • The program provides eligible financial institutions in cooperation with the EDC, small businesses, and not-for-profits, with interest free loans of up to $40,000 to help with their operating costs.
  • The CEBA loan will be subject to conditions that can be found here.

Eligibility

  • There are two streams for the CEBA account with different eligibility requirements: 1) the payroll stream and 2) the non-defferable expenses stream.
  • To be eligible for the payroll stream, businesses must:
    • Have paid $20,000-$1.5 million in total payroll in 2019;
    • Be a Canadian operating business in operation as of March 1, 2020;
    • Have a federal tax registration;
    • Have an active business chequing/operating account with its primary financial institution (the Lender) that was opened on or prior to March 1, 2020 and must not have been in arrears on existing borrowing facilities with the Lender by 90 days or more as at March 1, 2020; and
    • Have not previously used the program and must not apply for support through this program at another financial institution.
  • Small business can still apply for CEBA if their payroll is less than $20,000 in the 2019 calendar year, under the non-deferrable expenses stream, provided that:
    • The business has a Canada Revenue Agency business number and has filed a 2018 or 2019 tax return; and
    • The business has eligible non-deferrable expense between $40,000-$1,500,000. Eligible non-deferrable expense could include costs such as rent, property taxes, utilities and insurance. Expenses will be subject to verification and audit by the Government of Canada. 
  • The CEBA loan is not available to certain borrowers listed here.

How to Apply

The CEBA program is now open for applications. To apply for CEBA, small businesses and not-for-profits should contact their financial institution directly.

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Large Employer Emergency Financing Facilitity (LEEFF)

Program Overview

  • The LEEFF will provide bridge financing (loans and guarantees), administered by the Canada Enterprise Emergency Funding Corporation (“CEEFC”), to Canada’s largest employers whose operational needs during the pandemic are not being met through conventional financing.
  • The federal government is making available loans of $60 million and above, based on the applicant’s cash flow needs. The loan size for each applicant will be assessed on a case-by-case basis.
  • The LEEFF will be subject to conditions that can be accessed here.

Eligibility

  • LEEFF will be open to eligible large Canadian employers who:
    • have a significant impact on Canada’s economy, as demonstrated by (i) having significant operations in Canada or (ii) supporting a significant workforce in Canada;
    • can generally demonstrate approximately $300 million or more in annual revenues; and
    • require a minimum loan size of about $60 million.
  • Large for-profit enterprises in all sectors, except for those in the financial sector, are eligible to apply for funding under the LEEFF.
  • Certain not-for-profit enterprises, such as airports, could also be eligible.
  • Companies that have been found guilty of tax evasion are not eligible under the program.
  • Companies seeking support must:
    • commit to minimizing the loss of employment and sustaining their domestic business activities, and
    • must demonstrate that funding under the LEEFF forms part of their overall plan to return to financial stability.

How to Apply

Large enterprises interested in applying for the program can find more details regarding the process here.

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Canada Emergency Commercial Rent Assistance (CECRA)

Program Overview

  • Under the CECRA, the program administrator, Canada Mortgage and Housing Corporation (“CMHC”) will provide forgivable loans to eligible commercial landlords, provided that the property owner reduces the rent owed by their eligible commercial tenants by at least 75% for the months of April, May and June, 2020.
  • The forgivable loans will be subject to conditions that can be accessed here.
  • The deadline to apply is August 31, 2020.

Eligibility

To qualify for CECRA, both the landlord and the tenant must meet certain eligibility criteria.

  • Landlords must:
    • own or be the landlord of commercial property in Canada that generates rental revenue from, and is occupied by, an eligible tenant;
    • have entered or will enter into a rent reduction agreement with the eligible tenant for the period of April, May, and June 2020, that will (i) reduce the eligible tenant’s rent by at least 75%, and (ii) include a moratorium on eviction for the period of April, May and June 2020; and
    • have declared rental income on their tax return (personal or corporate) for tax years 2018 and/or 2019.
  • Tenants must:
    • pay no more than $50,000 in monthly gross rent per location (as defined by a valid and enforceable lease agreement);
    • generate no more than $20 million in gross annual revenues calculated on a consolidated basis (at the ultimate parent level), and
    • have temporarily ceased operations (i.e. generating no revenue), or has experienced at least a 70% decline in pre-COVID-19 revenues, when compared to April-June 2019 or an average of revenues earned in January-February 2020.
    • CECRA is also available for non-profit and charitable organizations.

How to Apply

Eligible landlords can apply through the portal found here.

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Regional Relief and Recovery Fund (RRRF)

Program Overview

  • The RRRF will provide nearly $962 million to help businesses and organizations in sectors that are key to regional and local economies, such as manufacturing, technology and tourism. 
  • The amount of funding provided will depend on the business's circumstances and may be equal to other government programs (i.e. CEBA).

Eligibility

  • The RRRF is intended to complement existing federal relief programs by offering financial assistance to small and medium-sized businesses that are unable to access or have exhausted other government programs.
  • Businesses must demonstrate that they have either applied for other federal relief measures and were unable to secure funds, or that they have accessed COVID-19 relief measures but continue to experience hardship.
  • Businesses in sectors that are critical to the resilience of local economies may be given priority.

How to Apply 

  • The RRRF is administered by the six Canadian regional development agencies. Each agency has unique application processes.
  • Interested parties should contact their local Regional Development Agency to apply.

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Innovative and Early-Stage Businesses

Program Overview

  • The Federal Government has allocated $250 million to the establishment of the Industrial Research and Assistance Program (IRAP). The program will assist innovative and early-stage businesses that are involved in producing or responding to COVID-19 health and safety issues by providing advice, connections and funding.

How to Apply

  • Applications are now closed. Interested parties can consult this page to find information about the latest program updates.

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Young Entrepreneurs

Program Overview

The Government of Canada will provide $20.1 million in funding to Futurpreneur Canada to ensure continued support for young entrepreneurs across Canada who are facing challenges due to COVID-19.

Eligibility

  • Existing Futurpreneur Start-up Program clients will be eligible for loan payment coverage for up to six months, from March 25 through to September 24, 2020.
  • In addition, Futurpreneur will offer a top-up, interest-free loan of up to $10,000 for clients who do not qualify for the CEBA but require extra working capital to help cover operating costs.

How to Apply 

Additional information about the application process for this funding can be found on the Futurpreneur website.

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Business in the Territories – Northern Business Relief Fund ("NBRF") and Yukon Business Relief Fund ("YKRF")   

Program Overview

The NBRF provides eligible small and medium-sized businesses operating in the Territories with a non-repayable grant of between $2,500 to $100,000 to cover operating costs such as rent, mortgages, and utilities.

Eligibility

  • In order to be eligible for funding, businesses must demonstrate that they are currently, and expect to continue, operating at a loss over the coming months (i.e. to incur ongoing expenses that are higher than incoming revenues) as a direct result of COVID-19.
  • Eligible recipients must predominantly operate in one or more of the Territories, and their operations must have a direct impact on the northern economy. In addition, recipients must have been in operation since at least October 1, 2019 and must have been solvent, financially viable, and not declared bankrupt prior to the onset of economic disruptions associated with COVID-19.
  • Priority will be given to SMEs with fewer than 20 employees, but applications will be considered from businesses with up to 100 employees.
  • All registered northern-based SMEs are eligible to apply, including sole-proprietors, partnerships and incorporated companies, provided they meet the other eligibility requirements. Franchisees and subsidiaries of larger corporations, government agencies, crown corporations and not-for-profit organizations are not eligible to apply.

How to Apply

  • Interested parties should send their completed application documents to their CanNor Regional Office for processing. Yukon businesses should apply through the Yukon Business Relief Fund if eligible, but can request to be considered as an applicant for both relief programs.   

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Women Entrepreneurs  

Program Overview

  • An additional $15 million dollars in support will be provided to existing recipient organizations funded through the Women Entrepreneurship Strategy. These funds will enable recipient organizations to provide support and advice to women entrepreneurs affected by COVID-19.

How to Apply

  • No new applications for funding are being accepting at this time.

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