Ottawa launches new loan program of up to $1M for firms walloped by COVID-19
The federal government has unveiled a new loan program aimed at helping businesses survive COVID-19, with up to $1 million in funding for eligible companies that have lost at least half their revenue.
It's called the Highly Affected Sectors Credit Availability program, or HASCAP, and Monday is the first day that business can apply.
Businesses can qualify for between $25,000 and $1 million if they meet the eligibility requirements, the main one being that they must show their revenues have fallen by at least 50 per cent for at least three months out of the previous eight.
For any business applying today, that time frame stretches back to June 1, 2020.
Generally speaking, the program is only for companies that have already qualified for and are receiving CEWS, the government's wage-subsidy program, or CERS, the rent subsidy.
Companies that didn't meet the requirements for those two programs but still wish to apply will be considered as long as they meet the 50 per cent revenue decline requirement.
The interest rate will be set at four per cent, and businesses will have up to 10 years to pay it back. Payments on the principal can be delayed for up to one year, at the start of the program.
Minister of Small Business Mary Ng said the program targets everyone "from that small mom and pop shop to larger tour companies."
"So whether it is your favourite neighbourhood restaurant, that bed and breakfast, a local movie theatre, or even a franchise restaurant or hotel, businesses that have been hardest hit by COVID-19 will now have the support that they need to keep moving forward."
Companies wishing to apply are instructed to apply at their regular bank or financial institution, but the loan will be backstopped by the Business Development Bank of Canada, the government-run funding pool that helps Canadian businesses expand.