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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:



Canada Emergency Rent Subsidy (CERS)

Program Overview

  • CERS provides subsidies for commercial rent or property expenses to Canadian businesses, non-profit organizations, and charities that have experienced a drop in revenue as a result of the COVID-19 pandemic. Renters and property owners that qualify for the subsidy will be provided direct payments, without involvement of their landlords. The program is scheduled to run from September 27 until June 2021.
  • Applicants can submit up to a maximum of $75,000 in eligible expenses per property, up to a maximum of $300,000 per business, and can receive a rent subsidy of up to 65% of these expenses.

Eligibility

  • To qualify for the CERS program, applicants must:
    • have had a CRA business number on September 27, 2020 (or had a payroll account on March 15, 2020, or had another person made payroll remittances on their behalf);
    • be an eligible business, charity, or non-profit (more information here);
    • have experienced any drop in revenue during the COVID-19 pandemic; and
    • have incurred eligible expenses related to a qualifying property (more information here).

How to Apply

  • To apply, businesses should submit an application through their CRA “My Business Account” portal.
     

Business Credit Availability Program (“BCAP”)

Program Overview

  • The BCAP provides support through three programs to individual business through the Business Development Bank of Canada (“BDC”) and Export Development Canada (“EDC”), along with private sector lenders. The three BCAP programs are:
  1. EDC Guarantee for Small or Medium-sized Enterprises (“SMEs”)
  2. BDC Co-Lending Program for SMEs
  3. BDC’s Mid-Market 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 SMEs

Program Overview

  • EDC will provide an 80% guarantee to eligible financial institutions in respect of new operating lines of credit and cash flow term loans for an eligible SME of up to $6.25 million. EDC provides a guarantee to your financial institution for the majority of the money you borrow, encouraging them to increase your company's access to credit.
  • At a minimum, the EDC Guarantee for SMEs is subject to the conditions listed here.
  • The program is available to SMEs until June, 2021.

Eligibility

  • The EDC Guarantee for SMEs is 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’ eligibility for the EDC Guarantee is also subject to additional requirements through approved financial institutions.
  • The EDC Guarantee for SME program is not available to certain entities listed here.

How to Apply

  • The EDC Guarantee for the SMEs program is now open for applications. To apply, businesses should contact their financial institutions directly.

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2. BCAP: BDC Co-Lending Program for SMEs

Program Overview

  • BDC and various financial institutions are working together to co-lend term loans to SMEs 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 $1 million to $12.5 million) must be used solely to support operational cashflow requirements of the SME.
  • The program is available until June, 2021.

Eligibility

  • The BDC Co-Lending Program for SME is available to Canadian SMEs that: were directly or indirectly impacted by COVID‐19, were financially stable and viable prior to the current economic situation, and that meet their financial institutions’ credit criteria.

How to Apply

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

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

Program Overview

  • This program provides 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. Under the program, loans will range between $12.5 and $60 million. These loans are provided jointly by BDC and eligible financial institutions.
  • The program is available until June, 2021.

Eligibility

  • Qualifying companies must have been directly or indirectly impacted by COVID‐19 and/or the recent decline in oil and gas prices, must be based or located in Canada, must have annual revenues in excess of $100 million to $500 million, must have been financially viable before the current economic downturn, and must have credit needs that exceed what is already available through the co-lending program and other measures.

How to Apply

  • To apply, businesses should contact their financial institutions directly.

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Canada Emergency Business Account
("CEBA")

Program Overview

  • The program provides eligible financial institutions, in cooperation with EDC, small businesses, and not-for-profits, with interest-free loans of up to $60,000 to help with their operating costs. Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 33% (up to $20,000).
  • As of December 4, 2020 CEBA loans for eligible businesses increased from $40,000 to $60,000.
  • Applicants who received a $40,000 CEBA loan initially, may apply for the $20,000 expansion.
  • All applicants have until June 30, 2021 to apply for a $60,000 CEBA loan or the $20,000 expansion
  • 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 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 of March 1, 2020; and
    • Have not previously used the program or applied for support through this program at another financial institution.
  • A 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:
    • it has a Canada Revenue Agency business number and has filed a 2018 or 2019 tax return; and
    • it has eligible non-deferrable expenses between $40,000 and $1.5 million in 2020. Eligible non-deferrable expenses 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 institutions 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 loans of $60 million and above available, based on the applicants' 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 demonstrate approximately $300 million or more in annual revenues; and
    • require a minimum loan size of $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
    • 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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Regional Relief and Recovery Fund (RRRF)

Program Overview

  • The RRRF was initially set to provide over $1.5 billion to help businesses and organizations in sectors that are key to regional and local economies, such as manufacturing, technology, and tourism.
  • The government is increasing the fund by up to $500 million, bringing total funding to over $2 billion (25% of this funding is earmarked for the tourism sector).
  • The amount of funding provided will depend on the business’s circumstances and may be equal to other government programs (i.e., CEBA).
  • With the increase in funding, businesses that are already receiving support could now receive up to $20,000 in additional funding if they meet the eligibility criteria.

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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Black Entrepreneurship Loan Fund  

Program Overview

  • Up to $33.3 million in support will be provided to offer loans between $25,000 and $250,000 for black business owners and entrepreneurs. The government will also be partnering with financial institutions to make up to $128 million available in additional lending support. 

Eligibility

  • Details regarding eligibility and the duration of this program are currently not available.

How to Apply

  • Details to come.

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Closed Programs


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 small businesses, provided that the property owner reduces the rent owed by their eligible commercial tenants by at least 75% for the months of April to June, 2020.
  • The forgivable loans will be subject to conditions that can be accessed here.
  • The program has recently been extended to capture rent from July to September; applicants, or those who were already participating, are voluntarily able to opt-in to these months.
  • The deadline to apply is October 30, 2020.

Eligibility

To qualify for CECRA, both the landlord and the tenant must meet certain eligibility criteria that can be found here. The following is a summary of major eligibility requirements.

  • 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 to September 2020; and
    • have declared rental income on their tax return (personal or corporate) for tax years 2018 and/or 2019.
  • Tenants must:
    • be a small business that pays 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 have experienced at least a 70% decline in pre-COVID-19 revenues, when compared to April-June, 2019 (if the business was operating at that time) or an average of revenues earned in January-February, 2020 (if the business was not operating during April-June, 2019).
    • CECRA is also available for non-profit and charitable organizations.
    • those who applied for CECRA when it was only available for the months of April to June are automatically eligible to opt-in for the additional months of July to August without having to reassess the 70% revenue criteria.

How to Apply

Eligible landlords can apply through the portal found here.

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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 the country who are facing challenges due to COVID-19.

Eligibility

  • Existing Futurpreneur Start-up Program clients were eligible for loan payment coverage for up to six months, from March 25, 2020 to September 24, 2020.
  • In addition, Futurpreneur offered 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 had to demonstrate that they were operating at a loss as a direct result of COVID-19.
  • Eligible recipients had to predominantly operate in one or more of the Territories, and their operations must have had 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 bankruptcy prior to the onset of the economic disruptions associated with COVID-19.
  • Priority was given to SMEs with fewer than 20 employees, but applications were considered from businesses with up to 100 employees.
  • All registered northern-based SMEs were eligible to apply, including sole-proprietors, partnerships, and incorporated companies, provided they met the other eligibility requirements. Franchisees and subsidiaries of larger corporations, government agencies, crown corporations, and not-for-profit organizations were not eligible to apply

How to Apply

  • Current recipients of the NBRF program are able to receive support beyond the original July 31, 2020 deadline. The extension is needs-based and would enable recipients to receive up to $100,000 or funding up to March 31, 2020, whichever comes first.
  • However, the deadline for new applications was July 31, 2020.

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Women Entrepreneurs

Program Overview

  • An additional $15 million in support is being provided to existing recipient organizations funded through the Women Entrepreneurship Strategy to enable them to offer 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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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 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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