The Business Development Bank of Canada (BDC) and Export Development Canada (EDC) are offering new programs to support medium-sized businesses under the expanded Business Credit Availability Program (BCAP).
On Monday, the BCAP was expanded by the federal government to help mid-sized companies with larger financing needs during the COVID-19 pandemic. The BCAP was initially aimed at primarily supporting small and medium-sized enterprises (SMEs).
These medium-sized business supports are in addition to measures already included in the BCAP, that will continue to be offered to SMEs, alongside other COVID-19 relief measures through BDC and EDC.
Under expanded criteria, EDC and BDC will cut larger cheques for medium-sized businesses whose credit needs exceed what is already available through the BCAP. Specifically, BDC will offer loans ranging between $12.5 million and $60 million each. EDC’s new loan guarantees will range in size from $16.75 million to $80 million each.
BDC expands co-lending program
To support medium-sized businesses, BDC has launched the Mid-Market Financing Program. The development bank will make additional credit available to complement businesses’ existing debt facilities. Loans will be issued through the businesses’ primary lenders.
Qualifying companies for the Mid-Market Financing Program must have been financially stable and viable prior to the current economic downturn. BDC said it “anticipates” that eligible companies for this new program will have annual revenues more than $100 million. BDC will be offering loans between $12.5 million and $60 million each.
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The agency said program details are still being finalized and that additional information will be made available in the next few weeks.
“The current situation is putting pressure on all business owners, big and small. With this additional support, medium-sized companies will be able to maintain their staff, preserve supply chains, and manage cash flow,” said Michael Denham, president and CEO of BDC. “We understand it will take time for both the economy and Canada’s businesses to stabilize and this new financing program is designed to serve as a bridge through this crisis.”
EDC expands loan guarantee
Under the expanded BCAP, loans from EDC will range in size from $16.75 million to $80 million. EDC will work with Canadian financial institutions to guarantee 75 percent of new operating credit and cash-flow loans for medium-sized businesses.
EDC said its portion of the expanded BCAP program aims to bring liquidity to companies “that tend to have” revenues ranging between $50 million and $300 million. These expanded guarantees will be available to exporters, international investors, and businesses that sell their products or services in Canada.
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EDC said the details are still being finalized and will be released in early June.
“Medium-sized companies represent 16 percent of employment in Canada and span all sectors. They are essential to the economic wellbeing of our country,” said Mairead Lavery, president and CEO of EDC. “Not only do they employ millions of dedicated Canadian workers, but they are essential to the livelihood of our industries, supply chains, and our communities.”
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