New Loan Program For Businesses Hit Hard By COVID-19

·2 min read

The Highly Affected Sectors Credit Availability Program (HASCAP) is a new initiative that offers guaranteed, low-interest loans to small and medium-sized businesses that have been strongly affected by COVID-19. Many businesses across the country continue to take a financial beating from COVID-19, whether they have had to limit their operations, switch to conducting business online, or had to shut down their operations entirely to comply with public health orders. The Government of Canada has launched HASCAP to increase the hardest-hit businesses’ ability to access new credit to finance their business operational costs.

To facilitate HASCAP, the Business Development Bank of Canada (BDC) has received a mandate from the Government of Canada to work with Canadian financial institutions to guarantee 100% of the value of a new low-interest loan for eligible businesses. This guarantee will cover loans ranging from $25,000 to $1,000,000, with repayment terms of up to 10 years. Businesses can also postpone their principal payments for the first 12 months.

To be eligible for HASCAP, businesses must:

· Be based in Canada

· Have been financially viable and stable before COVID-19

· Have experienced a minimum of a 50% decrease in revenue for at least three months (doesn’t have to be consecutive months) within the eight months preceding the date of the HASCAP application, and have already used the Canada Employee Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS)

If the business did not qualify for CEWS or CERS but meets all of the other HASCAP eligibility requirements, it must provide financial statements reflecting a minimum of a 50% decrease in monthly year-over-year revenue for at least three months (doesn’t have to be consecutive months) within the eight months preceding the date of the HASCAP application

Eligible businesses can start applying for HASCAP at their primary financial institutions on February 1, 2021. Businesses can only apply for HASCAP at one financial institution.

HASCAP is available until June 30, 2021.

Please visit bdc.ca/HASCAP for more information.

Dean LaBerge, Local Journalism Initiative Reporter, Grizzly Gazette