OTTAWA – Businesses wishing to participate in a new federal lending program will face sharp declines in revenue during the pandemic and have already requested further business assistance.
The new loans, from the Credit Availability for Highly Affected Sectors (HASCAP) program, will be open for applications on Monday and will complement existing loan programs targeting small businesses.
Loans will start between $ 25,000 and $ 1 million for a single business, depending on the size of the transaction, and will rise to $ 6.25 million for businesses with multiple locations such as a hotel or restaurant chain. .
Details released Tuesday indicate that rates will be set at 4% overall, with terms of up to 10 years, with up to 12 months deferral of principal payments at the start of the loan.
But to get the money, businesses will need to show a year-over-year drop in revenue of 50% or more over three months, not necessarily consecutive, in the eight months before filing a claim.
Companies will also have to show that they have at least applied for either the federal salary or the rent subsidies.
The federally guaranteed loan can be used for rent, utilities, and payroll assistance, among other costs, to maintain operations despite public health restrictions, but cannot be used to pay or refinance existing loans.
Small Business Minister Mary Ng said the funding was not intended for any particular industry, but available to any business that meets the eligibility criteria.
“So whether it’s your favorite neighborhood restaurant, that bed and breakfast, a local movie theater, or even a franchise restaurant or hotel, the businesses hardest hit by COVID- 19 will now have the support they need to keep moving forward. “Ng said via video at a noon press conference.
The President of the Canadian Federation of Independent Business is delighted with the launch of the new program to provide fresh financing to companies in difficulty.
But Dan Kelly also said in a tweet that the government should consider making part of the loan repayable, like an existing aid program, because “more loans are not the answer to the mountain of debt that small businesses are facing. faced “.
This report by The Canadian Press was first published on January 26, 2021.
