Last Updated: April 16, 2020
Practically every business is being affected by the economic downturn caused by the COVID-19 pandemic, but small businesses can be hit particularly hard.
When you’re an entrepreneur and your revenue suddenly drops, it’s easy to become overwhelmed by the overhead costs of your business. But there are several recently-created funding resources that are designed to help.
These programs focus on making loans available to provide the capital needed to sustain your small business. For more information on financial support (such as for your personal living expenses) check out our article on financial resources during COVID-19.
Business Credit Availability Program (BCAP)
What is the BCAP?
BCAP is a new program that helps support small and medium-sized businesses by providing direct lending and other types of financial support.
The program will provide a total of $65 billion in support, with no limit on the amount that can be given to any single business. These loans are provided at market rates (meaning you’ll have to pay normal interest rates).
Basically, this program makes funds available to private-sector financial institutions—such as your bank—to make it easier for them to provide loans during this time of uncertainty.
Who can get it?
Small or medium-sized businesses with a viable business model are eligible to apply, but must qualify through their financial institution’s standard due diligence process.
How to access it
Support through BCAP is available now. To access it, you can speak to your financial institution. They will assess your request and contact BDC and EDC if appropriate.
Canada Emergency Business Account
What is the Canada Emergency Business Account?
The Canada Emergency Business Account can help by offering loans up to $40,000 to small businesses and not-for-profits interest-free until December 31, 2022. In addition, up to $10,000 of the loan is eligible for complete forgiveness if the other $30,000 is fully repaid by December 31, 2022.
This program is designed to help businesses cover their operating costs when facing reduced revenues due to the COVID-19 pandemic.
Who can get it?
Small business or not-for-profit organizations that have paid between $50,000 to $1 million in total payroll in 2019 to cover essential operating costs of the business.
How to access it
This program is expected to roll out in mid-April. You can apply by speaking with your primary financial institution.
Small and Medium-sized Enterprise (SME) Loan and Guarantee Program
What is the SME Loan and Guarantee?
The SME Loan and Guarantee program will enable up to $40 billion in additional lending. It involves two initiatives: BBC co-lending and the EDC BCAP Guarantee.
Through the BDC co-lending program, you can get loans of up to $6.25 million at commercial interest rates. The loans have a 10-year repayment period.
It’s referred to as “co-lending” because it involves the BDC working with financial institutions. The BDC will provide 80 per cent of the loan, and the financial institution will cover the other 20 per cent.
With the EDC BCAP Guarantee, the EDC will also provide funding to guarantee loans of up to $6.25 million. Using both of these lending streams, eligible businesses can get a total of up to $12.5 million.
Who can get it?
Small or medium-sized businesses directly or indirectly affected by the COVID-19 pandemic. The business must have been financially viable prior to the impact of COVID-19.
How to access it
You can apply through your primary financial institution. According to BDC, more details on how to apply will be posted on financial institution websites in the coming weeks.
Additional Support Programs
To find out more about all the COVID-19 financial support programs that are available, check out the page for Canada’s COVID-19 Economic Response Plan.
In addition, there is a wide range of other grants available that are unrelated to COVID-19 but can still provide essential help in these times. They include grants for improving your business in many ways, such as by investing in assistive technology, financing an expansion, or reducing waste and pollution.
For more information about the grants available to you, check out the Government of Canada’s Business grants and financing page.
More Information on BDC and EDC
Many of these support programs are offered through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). The BDC focuses on supporting the development of small and medium-sized businesses. It provides capital, financing, and advisory services.
You can contact BDC directly at:
1-877-232-2269
EDC is Canada’s export credit agency. Typically, it focuses on supporting Canadian exporters and investors, helping them expand their international business.
However, in the face of the coronavirus outbreak, the EDC has been given a new domestic mandate. It will now focus on helping all types of micro, small, and medium-sized businesses, regardless of whether they serve international markets.
You can contact EDC directly at:
1-800-229-0575
This article offers general information only, is current as of the date of publication, and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.