Hotels, restaurants, tourism/travel businesses, and those that rely on in-person service — this one’s for you.
Yesterday, Jan. 26/2021, the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade, announced the launch of the Highly Affected Sectors Credit Availability Program, or HASCAP.
This new COVID-19 loan will provide financial support to businesses in the hardest-hit sectors, whether they are operating at limited capacity, switching to online-only services, or suspending operations entirely.
Through HASCAP, the Business Development Bank of Canada (BDC) has been mandated to work with participating Canadian financial institutions to offer government-guaranteed, low-interest loans from $25K up to $1 million. Hard-hit businesses, like a chain of hotels or restaurants with multiple locations under one related entity, could be eligible for up to $6.25 million.
HASCAP will help businesses with their day-to-day operating costs during the COVID-19 crisis and enable them to invest in their longer-term prosperity. To be eligible:
- Businesses must show a year-over-year revenue decline of at least 50% in three months, within the eight months prior to their application. Your financial institution will require the following information to process your request:
- If your business has received the Canada Emergency Wage Subsidy (CEWS) or the Canadian Emergency Rent Subsidy (CERS), when you apply, make sure you have your Canada Revenue Agency attestation forms demonstrating a minimum 50% revenue decline, for at least 3 months, within the 8-month period prior to the date of your HASCAP Guarantee applications.
- If your business did NOT RECEIVE CEWS or CERS payments and is ELIGIBLE for it, you must apply for CEWS and/or CERS.
- If your business applied for but does NOT QUALIFY for CEWS and CERS, you must provide financial statements that reflect at least three months (which do not need to be consecutive) of monthly year-over-year revenue decrease of a minimum of 50% per month, within the 8-month period prior to the date of the HASCAP Guarantee application.
- Unlike the Canada Emergency Business Account (CEBA), a $60,000 loan launched through BDC early on in the pandemic, HASCAP does NOT have a forgivable loan portion. However, repayment terms are up to 10 years, and there will be up to a 12-month postponement on principal repayments at the start of the loan.
- Even if your business has received other COVID-19 government emergency funds, you can still apply for HASCAP.
Eligible businesses can start applying as early as Feb. 1/2021 at principal financial institutions and more widely by Feb. 15. The BDC guarantee will be available until June 30, 2021. Interested businesses should contact their primary lending institutions.