COVID-19 Financial Relief – Part 6: The BCAP

Welcome to Part 6 of AF Accounting’s COVID-19 financial relief series. So far we have covered: Part 1 Canada Emergency Response Benefit (CERB), Part 2 Canada Emergency Business Account (CEBA), Part 3 extended tax deadlines, Part 4  taxation of the CERB, and Part 5 Canada Emergency Commercial Rent Assistance (CECRA) benefit. Part 6 looks at the Business Credit Availability Program (BCAP).

What is the Business Credit Availably Program (BCAP)?

The BCAP is administered through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) to provide additional credit solutions that can help keep companies afloat.

Types of BCAP Loans

Loans for SMEs

Under this program, EDC has partnered with approved Canadian banks to help small and medium-sized enterprises, or SMEs, get new operating credit and cash flow term loans to help with operation expenses. The loan can be up to $6.25 million for qualifying businesses. Eligibility requirements are: have a need for working capital due to loss revenue from COVID-19, and funds are issued through a new (not existing) line of credit or term loan.

Co-lending for SMEs

Under this program, BDC is assisting financial institutions with co-lending where BDC finances 80 per cent of the loan and the remainder is financed by a bank.

Credit for mid-sized companies.

BDC is offering commercial loans to mid-sized businesses. To be eligible, the company must have annual revenues of $100+ million and have a need for credit that is already beyond what the BCAP and complementing programs offer. Loans are between $12.5 million and $60 million.

EDC also has a program for mid-sized/larger businesses. Under the mid-market guarantee and financing program, EDC will help support companies with annual revenues between $50 million and $300 million by providing Canadian banks with a 75 per cent guarantee for new operating credit and cash flow loans. The size of the loan companies can access under EDC’s guarantee program are between $16.75 – $80 million.

Designing a comprehensive strategy for financial support

The BCAP is just one set of programs designed to support your business during these unprecedented times. There are other programs that help pay your employee’s wages, programs for commercial rent support, and individual programs for employees. It can be difficult to make sense of which program is right for your company but AF Accounting is here to help.

Together we can assess your current position and design a path forward that leverages the best programs for your company’s current and future needs. We show you the short and long-term impacts of your strategy, along with how to minimize or save up for the tax implications.

These are difficult times for many businesses and these new and untested programs are being rolled out quickly to keep Canadian businesses afloat. We understand that businesses can feel frightened and overwhelmed in trying to create new business models, shift business online, and have employees working from home on top of learning which government programs they need. Rely on AF Accounting to help you navigate the ever-changing world of COVID-19 benefits along with your usual bookkeeping and tax filing. Contact us today to learn more.

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