Access to credit during Covid-19

[Paula]

What is being done to ensure better access to credit for retailers? Thanks

[Laura]

Hi Paula, please see the resources available as of May 15, 2020.

The Canada Emergency Business Account (CEBA), the federal Business Credit Availability Program (BCAP), and the Large Employer Emergency Financing Facility (LEEFF) provide eligible retailers with government-backed credit solutions.

Interested retailers should Contact your primary financial institution and credit unions to apply.

· Canada Emergency Business Account (CEBA): this program provides interest-free loans of up to $40,000 to small businesses and not-for-profits to help cover their operating costs where their revenues have been temporarily reduced. To qualify, retailers will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. 25% (up to $10,000) of the loan is forgivable if the loan balance is repaid by December 31, 2022.

o Loan Guarantee for Small and Medium-sized Enterprises: the government is working with financial institutions to issue new operating credit and cash flow term loans of up to $6.25 million to SMEs.

o Co-Lending Program for Small and Medium-Sized Enterprises: the government is working with financial institutions to co-lend term loans to SMEs for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25 million through the program.

· Business Credit Availability Program (BCAP)

o EDC Loan Guarantee for Small and Medium-sized Enterprises: the government (Export Development Canada) is working with financial institutions to guarantee 80% of new operating credit and cash flow term loans of up to $6.25M.

o BDC Co-Lending Program for Small and Medium-Sized Enterprises: the government (Business Development Canada) is working with financial institutions to co-lend (up to 80%) term loans to SMEs for their operational cash flow requirements. Eligible businesses may obtain loans of up to $6.25 million. The loans are available up to September 30, 2020.

o BDC’s Mid-Market Financing Program. This will provide commercial loans between $12.5M to $60M to medium-sized businesses who need additional support. Qualifying retailers may need to have annual revenues over approx. $100M. To receive updates as the program develops, you can sign up on the BDC’s website. View sign-up at the following link: https://www.bdc.ca/en/pages/mid-market-form.aspx

o EDC’s Mid-Market Guarantee and Financing Program. This is intended to bring liquidity to companies who tend to have revenues of $50 – $300M so that they can sustain operations. EDC is working with Canadian financial institutions to guarantee 75% of new operating credit and cash-flow loans, ranging from $16.75M to $80M. Those to whom these expanded guarantees are available include exporters, international investors and businesses selling their products or services within Canada. More details to be released as the program opens.

· Large Employer Emergency Financing Facility (LEEFF). The LEEFF program is intended to provide bridge financing to many large for-profit businesses, including retailers, to help keep their operations going. Annual revenues to access the program generally need to be in the order of at least $300 million. To be eligible, businesses must be seeking financing of about $60 million or more, have significant operations or workforce in Canada and not be involved in insolvency proceedings. More details will be released as the program opens.

For more information on BCAP, CEBA and LEEFF, see the federal government’s COVID-19 Economic Response Plan, the BDC and
the EDC.

I hope you find this information helpful.

Also Paula, I’d like to let you know that Duke Heights BIA is currently providing BIA members with the opportunity to schedule a Free 1-on-1 Virtual Consultation with one of our verified partners during Covid-19, to assist with Federal Support Application programs and Financial consultation. This service is sponsored by the BIA and available Monday to Friday. Bookings are reserved for BIA Members only and will be scheduled on a first come first serve basis. If you are interested in connecting with us on this matter, please visit https://dukeheights.ca/booking/ to book your consultation.