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Help with Cash Flow:  The Canada Emergency Business Account and the Business Credit Availability Program

Next up in our series of COVID-19 related relief is access to much needed credit to help manage your businesses cashflow during this time of uncertainty.  

Canada Emergency Business Account (CEBA):

What is it?

Up to $40,000 in interest free financing (until December 31, 2022) to help your business pay for costs that you were unable to defer as a result of COVID-19.  

$10,000 (25%) of the $40,000 loan is eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022.

If the loan is not fully repaid by December 31, 2022, it will be extended for an additional 3-year term at 5% per year. The loan can be prepaid at any time without penalty.

How do I qualify?

Your organization must demonstrate that their total payroll was between $50,000 and $1,000,000 in 2019.

Where do I apply?

Applications will be made online through a portal made available by your financial institution.

The Business Credit Availability Program (BCAP):

What is it?

$65 Billion in direct lending and other types of financial support at market rates made available through the BDC and EDC to businesses with viable business models whose access to financing would otherwise be restricted.

Where do I apply?

Businesses seeking financing through the BCAP should work first with their financial institution where they have a pre-existing relationship.  If the needs of the client exceed the level of support the financial institution is able to provide, the financial institution will work alongside the BDC or EDC to access additional resources the government has made available under the BCAP.

What kind of support could my firm expect?

  • Working capital loans of up to $2 million with flexible terms and payment postponements for up to 6 months for qualifying businesses; 
  • Flexible repayment terms, such as postponement of principal payments for up to six months, for existing BDC clients with total BDC loan commitment of $1 million or less
  • Reduced rates on new eligible loans
  • Additional details regarding Business Credit Availability Program (BCAP) measures, including industry specific support, to be announced at a later date.

For a full list of government relief programs as part of Canada’s COVID-19 Economic Response Plan click here.

At Finally, we’re using our expertise to help businesses in our community understand and take advantage of the resources made available during the COVID-19 pandemic. In case you missed it, in our last blog post, we did a deep dive into The Canada Emergency Wage Subsidy program. We will continue to share information and update posts as programs change.