Weekly Digest – 10 June 2020

Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.

Government Aid For Businesses

On top of the $40 million funding in Quebec announced in April, small- and medium-sized businesses in Montreal will soon be able to apply for low-interest loans under a new program, as it has the most COVID-19 cases in any Canadian city. The federal government is contributing $30 million and the provincial government is putting forward $20 million to accumulate a total funding of $50 million.

Businesses that are ineligible for other financial aid schemes are encouraged to apply for loans of up to $40,000 under this new program. Don’t know where to start? Feel free to get in touch with us so we can assist you with your application and find other financial support schemes that you are eligible for.

Bounce Back With a New Business Plan

While some business owners can see the ‘light at the end of the tunnel’ now, it’s hard to tell how your business will recover and perform when we enter the new normal. With this, it’s best to prepare and put a solid business plan in place for the months ahead , especially those which have been severely hit by the pandemic.

We know that writing a new business plan might be the last thing on your mind right now, as you are trying to keep your business afloat. However, every successful business invests time and effort on business planning. To make it easier for you to create a new one that factors in the risks and implications of the pandemic, we’ve created a FREE downloadable business plan template. Please get in touch if you’d like to talk about your plan – especially the financial parts like cashflow.

Reopening the Economy

As the government is slowly opening up the economy and looking at ways to ease restrictions without compromising public health, it is best to proceed with caution. Here are some useful guidelines to reopening for various industries:

Loan Programs for Businesses in Canada

In order to help small- and medium-sized businesses gain easier access to the capital they need to see them through the COVID-19 situation, the Government of Canada has launched new loan programs including:

The Canada Emergency Business Account (CEBA), which will provide interest-free loans of up to $40,000 for small businesses and not-for-profits. The eligibility criteria for this program has recently been expanded to include “many owner-operated small businesses”. With this new criteria, businesses with payrolls of less than $20,000 are now eligible to apply. While this is good news for those businesses, additional details and the date for applications are expected to be released shortly. Get in touch with us to stay updated and let us help you assess if you meet the requirements for these loans.
Export Development Canada (EDC) will guarantee new operating credit and cash flow term loans to small- and medium-sized businesses, up to $6.25 million, under the Business Credit Availability Program Guarantee. This financial support is available until or before 30 September 2020.
The Co-lending Program will bring Business Development Bank of Canada together with other financial institutions to co-lend term loans to small- and medium-sized businesses to provide additional liquidity and help them meet their operational cash flow requirements.

If you are unsure which loan schemes are best for your business, don’t hesitate to contact us and we will help you assess based on your current financial situation and business needs.

Extension to Wage Subsidy

Recently, the Government announced an extension to the Canada Emergency Wage Subsidy (CEWS) for an additional 12 weeks, taking it to August 29. There have also been changes made to extend the eligibility of the program to include organizations, such as partnerships and educational and training institutions.

This is great news for eligible employers as this 75% subsidy on employee wages will enable you to re-hire workers previously laid off due to COVID-19, and help you better position your business to get back up to speed following the crisis. More information can be found here, but feel free to chat with us for any clarifications or questions you may have.

What’s next?

Over the last few weeks we’ve brought you updates on various government initiatives and cash flow schemes aimed at helping employers keep their businesses afloat amid the COVID-19 situation. We’ll keep you updated on new financial support available and if anything changes on existing ones, but please feel free to get in touch to discuss what these schemes mean for your business.