Canadian Support for Businesses During the Coronavirus Pandemic

Canadian Support for Businesses During the Coronavirus Pandemic

The Coronavirus pandemic has disrupted not only the day to day lives of many Canadians but also the country’s economy. The government has decided to take immediate action to provide financial support to businesses and enterprises facing hardships due to the outbreak. The government of Canada created the Canada Emergency Business Account to help those businesses struggling due to the Coronavirus.

What Is the Canada Emergency Business Account?

The Canada Emergency Business Account (CEBA) was developed to ensure that business owners have access to capital throughout COVID-19. The Canada Revenue Agency aims to allow small business owners and non-profit organizations to access loans of up to $40,000 without any interest rates. The funds can assist them in covering operating costs even though they are experiencing reduced revenues due to the overall economic impact caused by the COVID-19.

Who Is Eligible for the Canada Emergency Business Account?

Business owners must fulfill specific requirements by the Canada Revenue Agency to be eligible for CEBA. For starters, they must have a business that was in operation as of March 1st, 2020. The borrower must have a federal tax registration under the Canadian government. The borrower is also required to have an active account with the lending entity and not be a previous beneficiary of the program. Additionally, the borrower is expected to participate in surveys conducted by the government of Canada if they are successful in securing the loan.

Who are the Excluded Borrowers?

Government organizations, unions, charitable organizations, religious organizations, and entities owned by senators and parliament members are not eligible for the business fund. Organizations or businesses that promote violence or any form of discrimination do not qualify for funding.

How to Apply for the Canada Emergency Business Account

If you are eligible for the loan, you can apply by contacting your financial institution and presenting all the required documents.

What Is Business Credit Availability Program?

The Business Credit Availability Program (BCAP) was designed by the Canadian government to provide credit solutions for individual businesses, including those involved in sectors such as tourism, gas, oil exports, and air transportation.

It is implemented by Export Development Canada and the Business Development Bank of Canada, in conjunction with other private lenders. The program provides a loan guarantee to medium-sized and small enterprises. They can use the funds they secure from the program to cater to their operational expenses, whether they are an exporting company or not. The program also caters to co-lending programs for such enterprises. Its average annual revenue determines the maximum finance amounts that a business can access from the program.

What Is Large Employer Emergency Financing Facility?

The Large Employer Emergency Financing Facility (LEEFF) program was primarily launched with employers in mind. The goal is to help businesses maintain a sound financial balance amid the current COVID-19 crisis while ensuring that they are prepared for life after the Coronavirus pandemic. Their needs as a result of the COVID-19 outbreak cannot be met through the conventional financing options that were previously available. The employers can secure funds from LEEFF to ensure that their operations keep moving despite the current crisis and that employees do not have to lose their jobs.

Employers can continue to pay their employees and ensure they retain their job while putting themselves in a good position for financial recovery once the pandemic is over. The Department of Finance, the Canada Development Investment Corporation and Innovation, Science and Economic Development Canada are the key players in this program.

What Is Canada Emergency Commercial Rent Assistance?

Canada Emergency Commercial Rent Assistance (CECRA) is designed to help small businesses and start-ups acquire financial relief during the Coronavirus pandemic. Small companies are the most affected by the Coronavirus, with most of them opting for closure. The program requires that property owners reduce the rent for their small business tenants by at least 75% in April, May, and June or any other subsequent months that the program will continue to be in action.

CECRA will cover over 50% of the rent while the tenant pays 25% of the total amount. The property owners will, therefore, forgo 25% of their regular rates.

What Is Regional Relief and Recovery Fund?

The Regional Relief Recovery Fund (RRRF) is aimed at helping organizations and businesses that are key to local economies and the regions. They include sectors such as technology, tourism, manufacturing, and agriculture. The fund was designed to target those unable to access existing support measures but need help to sustain their operations and recover from the COVID-19 pandemic.

What Is Industrial Research Assistance Program?

The Industrial Research Assistance Program (IRAP) was designed by the Canadian government to provide financial assistance to development projects by Canadian innovators and accelerate their success. Although its primary target is small businesses and start-ups that focus on process improvements, it can also assist large scale projects that can lead to new capabilities.

Government Canada funds the program, and with this, people from anywhere across the country can apply for the funds. The projects of potential beneficiaries are evaluated by a designated industrial technology advisor within the organization. Once their level of risk and technical uncertainty is confirmed, the innovators receive the funds.

Why These Programs Are Beneficial to Canadian Businesses?

The above programs are beneficial to entrepreneurs and business persons in various ways. One of the most notable benefits is that they do not have to incur high-interest rates while paying back the loans. Therefore, the entrepreneurs can take the pressure of high repayment rates off their backs and focus on improving the products or services that their business offers.

Secondly, the above programs are easily accessible. Numerous banks offer them across the country. Government agencies are willing to take a risk where a bank or an investor wouldn’t.
Many entrepreneurs can secure funding for their business and ensure continuity amid and after the coronavirus. Additionally, there is a wide range of categories where entrepreneurs can place their businesses. They are, therefore, likely to secure funds from either of these categories.