April 9th, 2020
BDC has been talking to many business owners over the past few weeks. Entrepreneurs who have spent years building solid, strong businesses are now fighting to keep them alive. There has never been a more difficult time to be a business owner than now.
BDC was one of the first places entrepreneurs turned to for support in the first days of the crisis. We have received more loan requests via our online platform in just three weeks than we typically do in a full year. Close to 1 million people went to our website, to use our tools and get our advice. BDC adjusted each day to respond to as many requests, as quickly as possible. BDC postponed payments introduced new working capital loans, streamlined our processes and forged new partnerships with financial institutions to get capital quickly to those that need it. BDC still has a bit of backlog, but BDC is getting there.
A host of new measures have been introduced by the Federal and Provincial governments. Many of these are in place and a few are still being refined but in total, they cover a lot of the economy. BDC understands it is a lot to take in while adjusting to our new reality and keeping a business afloat. Attached is a complete reference guide describing the business support measures introduced by the Federal and Provincial Governments.
Details about BDC’s support measures are described below. BDC will also be participating in a series of webinars to answer questions you may have. Please join us at our next one with EDC on April 16, 2020, at 1 pm. To register please visit this link: COVID-19: Get financing and support for your business.
FINANCING FOR SMES
BCAP SME Loan and Guarantees Program
The breadth of the business cash crunch and the speed with which it took hold resulted in an unprecedented demand for financial assistance. To get capital out quickly and efficiently, BDC and EDC launched the new Small and
Medium-sized Enterprise Loan and Guarantee Program (BCAP) that will enable up to $40 billion in additional lending.
▪ SMEs can get support through a new Co-Lending Program that will bring the BDC together with financial institutions to offer term loans to businesses for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts up to $6.25 million, 80 percent of which would be provided by BDC, with the remaining 20% by a financial institution.
▪ EDC will also provide a guarantee to financial institutions so that they can issue new operating lines of credit of up to $6.25 million to small and medium-sized businesses. These will be 80 percent guaranteed by EDC, to be repaid within one year.
▪ Eligible companies could obtain up to $12.5 million through these two lending streams.
Financial institutions across the country are also able to give a loan under the new Canada Emergency Business Account (CEBA). CEBA is a $25 billion program providing government-backed interest-free loans of up to $40,000 to small businesses via eligible financial institutions. If repaid by December 2022, 25% of the loan is forgivable.
All legal businesses will now be eligible for BCAP and CEBA. Businesses in the cannabis sector, those in the hospitality sector including restaurants, bars, pubs and lounges, for example, are all included under BCAP. It means that all legal businesses can access BCAP financing via their financial institutions.
BDC is encouraging all businesses in need of a loan to see their financial institution to benefit from these new products.