Federal Government Launches Highly Affected Sectors Credit Availability Program
OTTAWA — The federal government has launched the Highly Affected Sectors Credit Availability Program (HASCAP), which will provide financial support to businesses that have been hardest hit by the pandemic.
HASCAP is designed to help businesses with their day-to-day operating costs during the COVID-19 crisis and enable them to invest in their longer-term prosperity. The funding is available to businesses across the country, in all sectors, that have been hit hard by the pandemic, including restaurants, tourism-and-hospitality businesses and those that rely on in-person service.
“We know that even the most resilient businesses continue to face incredible challenges,” says Mary Ng, Minister of Small Business, Export Promotion and International Trade. “We are launching the Highly Affected Sectors Credit Availability Program to help those businesses hit hardest by the pandemic with low-interest, government-backed loans. By investing in Canada’s businesses, as well as workers and their families, we are investing in our shared recovery and a better future for all.”
The program, which was originally outlined in the 2020 Fall Economic Statement, will see the Business Development Bank of Canada (BDC) work with participating Canadian financial institutions to offer government-guaranteed, low-interest loans of up to $1 million. Hard-hit businesses such as a chain of hotels or restaurants with multiple locations under one related entity, could be eligible for up to $6.25 million.
The program offers up to a 10-year re-payment term with a four-per-cent fixed interest rate, as well as a postponement of principal re-payments of up to 12 months at the start of the loan. The loan proceeds from HASCAP can’t be used to pay down an existing debt/lease facility.
The Hotel Association of Canada (HAC) has also stated that, in a special advance technical briefing on HASCAP with senior leaders at the BDC and Department of Innovation, Science and Economic Development Canada, BDC indicated it will consider loan application for more than $1-million per entity in circumstances where individual hotel properties are not separately incorporated.
To be eligible for HASCAP, businesses need to show a year-over-year revenue decline of at least 50 per cent in three months, within the eight months prior to their application. They must also be able to show their financial institutions that they have previously applied for either the Canada Emergency Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS).
Eligible businesses can start applying as early as February 1 at principal financial institutions and more widely by February 15. Interested businesses are directed to contact their primary lender to get more information and to apply. Additional information is also available at bdc.ca.
HAC is also planning a special Q&A webinar with BDC officials to help members prepare to apply for HASCAP. Further details on this event are expected in the coming days.