The Government of Canada is showing support for Canadian businesses that may be experiencing difficulties due to the worldwide COVID-19 pandemic.

The government's response plan is fluid, as the Canadian economy continues to adjust to these turbulent times. It is important to stay updated daily, to see if your business can benefit. Key areas of support, the latest details of which are set out below, include access to credit, retaining employees and key personnel, providing market stability and granting flexibility:

ACCESS TO CREDIT:

  • Business Credit Availability Program ("BCAP") – On March 13, the government of Canada announced the BCAP. This measure will increase the credit available to small, medium, and large Canadian businesses by providing $65 billion (previously announced at $10 billion) of additional support through the Business Development Bank of Canada ("BDC") and Export Development Canada ("EDC"). This additional credit will be available at market rates to businesses with viable business models whose access to financing would otherwise be restricted, including but not limited to, Canadian businesses in the following industries: oil and gas, air transportation, exportation, and tourism. This program is broken down into three parts:

i. Canada Emergency Business Account – In a targeted response to liquidity issues faced by small businesses, the Government of Canada announced the launch of the new Canada Emergency Business Account, which will be implemented by eligible financial institutions in cooperation with EDC. This program will provide $25 billion of interest free loans of up to $40,000 each to small businesses and not-for-profits.

a. In order to qualify for this program, organizations will need to demonstrate that they paid between $50,000 to $1 million in total payroll in 2019. Additionally, loan forgiveness of 25% (up to $10,000) will be granted if the applicable loan balance is paid off prior to December 31, 2022.

ii. Loan Guarantee for Small and Medium-Sized Enterprises – For small and medium-sized enterprises, EDC will guarantee new operating credit and cash flow term loans that financial institutions extend to small and medium-sized enterprises, up to $6.25 million.

iii. Co-Lending Program for Small and Medium-Sized Enterprises – For small and medium-sized enterprises, BDC will co-lend term loans up to $6.25 million in partnership with eligible financial institutions to assist businesses with their operational cash flow requirements.

Download >> Canada's COVID-19 Economic Response Plan: How Can Your Business Benefit?

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