Canada Emergency Business Account (aka CEBA) has been the most talked-about government support program for small businesses. Since its launch, it has helped many small businesses with the liquidity pressures faced during the pandemic. Many small businesses find the ease of access and a waiver of $10,000 out of $40,000 principle amount very attractive features.
Unfortunately, CEBA comes with different eligibility requirements and other conditions on the use of funds. As of today, many small businesses find it difficult to access CEBA due to complicated non-deferrable expenses rules. The payroll stream often makes solopreneurs or microbusinesses ineligible for CEBA as they do not meet payroll requirements.
The second wave of Covid-19 and a fresh set of lockdowns resulted in a renewed demand for access to working capital and funds. Hence, a new range of inquiries on eligibility for CEBA!
Disclaimer: This post is not financial or tax advice of any kind. Further, this post is up to date at the time of its publishing. Hence, we caution our readers to follow the individual program links for up-to-date information. If you need more information, get in touch with your professional accountant.
Many small businesses are not aware of the other financing and government support programs other than CEBA. There is a long list of programs available at the government of Canada website here. However, we have narrowed down to some of the alternatives to CEBA.
Community Futures Development Corporations – RRRF
For the small businesses that are not eligible for CEBA, this program offers loans up to $40,000. It also comes with a 25% forgivable element if the businesses pay back the loan by 12/31/2022. In order to utilize this financial support, businesses must contact their local community futures development corporation.
The deadline to apply for financing under this program is March 31, 2021, or until the funding is exhausted, so it’s better to apply as the soonest.
More details about this are here.
Regional Development Agencies – Regional Relief & Recovery Fund (RRRF)
These programs are run by different regions for the businesses who are not eligible for other government funding programs. These programs have their own criteria and vary from region to region.
Under RRRF, these fundings are repayable or non-repayable (or conditionally repayable) based on the local needs of different programs. This program is also available until March 31, 2021 or until the funds last.
EDC Business Credit Availability Program (BCAP) Guarantee
EDC BCAP Guarantee is available for all the businesses impacted by Covid-19. Export Development Canada (EDC) provides a guarantee of 80% to the financial institution on the new term loans or line of credits for a total loan of $6.25 million. The size of the loan is determined by your primary bank based on its own credit criteria.
The EDC BCAP Guarantee is available for both exporting and non-exporting businesses in Canada. Further, EDC also defers the guarantee for the first 6 months.
The program is available until June 2021 and more details are here.
BDC Working Capital Loan
Different businesses with differing cash requirements can access working capital loans from BDC. Businesses can be of different size and can avail up to $2 million of the working capital loan if affected by Covid-19.
The details of the program are on the BDC website here.
BDC Co-Lending Program
If Covid-19 has impacted your business and your operational cash needs are between $ 1 million and 125.5 million, BDC co-lending program is for you. The program co-lends with your financial institution based on your bank’s credit criteria. Different financial institutions have different credit criteria, so you must check with your bank for the same.
More details about the program are here.
Futurpreneur – Young Entrepreneurs in Futureprenur network
Futurpreneur provides financing and mentorship to young entrepreneurs. If you happen to be in the Futurpreneur network and your startup is struggling with cash, you can access financing through them. This option is however limited for non-network and already established businesses.
There are many other programs that small businesses can use to access the working capital. Most of the programs from the government provide support for operational cashflows. If you are looking for business expansion, you can always access credit from financial institutions.