Applications for emergency co-lending begin to open as BDC finalizes program

The Business Development Bank of Canada (BDC) has finalized details of the $20 billion co-lending program, which is part of the federal government’s Business Credit Availability Program (BCAP). Financial institutions will now roll out applications for the loans today and in the coming days.

BDC’s co-lending program will give eligible businesses access to incremental credit of up to $6.25 million through their financial institution.

Business owners must contact their primary financial institution, which will assess their situation, structure the financing, and deploy the capital. The commercial support is intended to help businesses affected by the COVID-19 pandemic finance their operational costs and cash flow needs. Eligible businesses can access incremental credit amounts up to $6.25 million, 80 percent of which will be provided by BDC, with the remaining 20 percent from their financial institution.

“BDC looks forward to expanding its commercial support to more Canadian entrepreneurs by leveraging the strong network of financial institutions across the country,” said Michael Denham, president and CEO of BDC. “Working hand in hand with key financial partners is a great example of our complimentary roles and joint efforts to better help businesses weather the impact of this unprecedented pandemic.”

Bank of Montreal (BMO) announced Thursday it is beginning to offer the co-lending program and encouraged business clients to reach out to their BMO relationship manager for more information.

The co-lending program is available to Canadian businesses impacted directly or indirectly by COVID-19 until or before September 30 2020. To be eligible, companies must have been financially viable and in good standing prior to the onset of the pandemic. The program was first announced by the government on March 27.

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Other support measures announced by BDC include working capital loans and flexible repayment terms such as principal postponements to help bridge entrepreneurs to a more stable time.

Last week, BetaKit reported that Scotiabank and the National Bank of Canada began rolling out the Export Development Canada (EDC) loan guarantee program for their clients. The EDC loan guarantee is also a pillar of BCAP, with the third being the Canadian Emergency Business Account (CEBA), which provides interest-free loans of up to $40,000 to Canadian small businesses and not-for-profits. The federal government expanded the eligibility criteria for CEBA this week.

“Our government, BDC, and Canada’s financial institutions are working together to provide critical support to Canadian businesses so that they can cover their operating costs, weather this incredible challenge, and rebuild once we’re on the other side of this,” said Minister of Small Business and Export Promotion Mary Ng. “Through this co-lending program, BDC will help business owners quickly access loans through their financial institutions, giving them the urgent help they need.”

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Isabelle Kirkwood

Isabelle Kirkwood

Writer, globetrotter, drone pilot & David Attenborough enthusiast