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Get A Loan Before You Need It – Business Credit Availability Program (BCAP)

Don’t wait, apply for that loan. If you delay now it may be too late by the time your business needs it. Companies that are desperate don’t qualify for equitable loans. Smart entrepreneurs look into the future, assess potential risks, and acquire lending in times of financial health. From the creditor’s perspective it makes sense, lenders know the game inside and out and they don’t bet on the wrong horse. If you risk it and wait until the last minute, you can still get the loan but in the end, the house almost always wins.

Fortunately, we have the updates and you have the options.

On March 13, 2020, the Government announced the establishment of a ‘Business Credit Availability Program’ (BCAP) to help Canadian businesses obtain financing during the current period of significant uncertainty. The BCAP will support access to financing for Canadian businesses in all sectors and regions.

Through this program, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will provide more than $65 billion in direct lending and other types of financial support at market rates to businesses with viable business models whose access to financing would otherwise be restricted.

By working in close cooperation with financial institutions, this program will fill gaps in market access and leverage additional lending by private sector institutions

What it means for your business:

It’s a $40,000 government‑guaranteed loan to help eligible businesses pay for operating expenses, payroll and other non‑deferrable expenses which are critical to sustain business continuity.

Until December 31, 2020, the Canada Emergency Business Account will be funded as a revolving line of credit for $40,000.

After December 31, 2020, any outstanding balance on the revolving $40,000 line of credit will be converted into a non‑revolving 5‑year term loan maturing on December 31, 2025, at which time the balance must be paid in full.

No interest applies until January 1, 2023.

Commencing on January 1, 2023, interest accrues on the balance of the term loan at the rate of 5% per annum, payable monthly on the last day of each month.

If you pay 75% of the balance of the term loan (as at January 1, 2021), on or before December 31, 2022, the remaining balance of your term loan will be forgiven. For example, if your balance is $40,000 on January 1, 2021 and you repay $30,000 on or before December 31, 2022, the remaining $10,000 will be forgiven.

If you do not repay 75% of the balance of the term loan (as at January 1, 2021) on or before December 31, 2022, the full loan balance and all accrued and unpaid interest will be due and payable on December 31, 2025.Don’t wait until it’s too late, it’s in your companies best interest to avoid high-interest rates and stay one step ahead during the COVID-19 pandemic.