COVID-19 loan for businesses that fall through cracks
The federally-funded Venture Niagara organization expects more businesses will want to access its new COVID-19 business loan program as the pandemic continues.
The nonprofit community economic development organization, based in Thorold, put aside existing money in its budget to create the special loans for businesses that fall through the cracks.
Frank Rupcic, general manager at Venture Niagara, said it has done loans for about 10 businesses so far in the past three weeks.
“I anticipate if this thing lasts longer or it’s going to be tough to get into business, then our demand for money will go up,” he said.
The organization could be getting some help with that after the federal government announced last month it’s giving $962 million to regional development agencies and the community futures network.
There are six regional development agencies across the country, with FedDev Ontario serving an area that includes Niagara. Venture Niagara is one of the organizations funded by FedDev.
Federal Minister of Economic Development Melanie Joly said details are coming soon about how the almost $1 billion will be distributed.
“What we have said is that for businesses that are falling through the cracks, that don’t have access to wage subsidy, or you don’t have access to the $40,000 loan (Canada Emergency Business Account), they can turn to FedDev, the federal development agency which I’m in charge of,” Joly said in an interview with The St. Catharines Standard last Wednesday.
“We will be announcing very soon the details, but essentially it is for businesses that can’t have access to loans from financial institutions and that really needed liquidity.”
Joly was speaking with The Standard after taking part in a video conference earlier in the week hosted by South Niagara Chambers of Commerce. That event can be viewed on any of the chamber’s websites.
Joly said the federal cabinet committee on COVID-19, of which she’s a member, has been working extremely hard and fast “building the plane as we fly it.”
The government’s announcement on April 17 included $675 million to support small- and medium-sized businesses through the regional development agencies that are unable to access the government’s existing COVID-19 support measures. Another $278 million will support rural businesses and communities by providing them access to capital through the Community Futures Network.
“These different organizations are also in different parts of rural Canada, and therefore they’re present in the Niagara region, and their funding will be also increased,” Joly said. “So that has been announced, but how that will be deployed will be coming up in a couple of days.”
Rupcic said his organization is looking forward to being able to administer whatever the details of the program are and are excited about helping more businesses. In the meantime, Venture Niagara started the COVID-19
business loan to help fill the gap for people who didn’t have access to federal money after a wide range of emergency programs were announced in rapid succession.
“What we wanted to do was not to provide the burden of heavy debt, because one of the things people don’t need right now is to take on more debt,” he said.
He said the special loans run $2,500 to $15,000 and with interest-only payments for the first year at a rate of 2.45 per cent. After the first year, the receiver must start making principle and interest payments at a rate of 3.45 per cent, which continues until the end of the loan.
Rupcic anticipates business owners will need money either to sustain their operations now or for marketing or to buy new stock when their businesses reopen. They are available to any type of business. “Everybody has a unique need,” he said. “Not everybody needs the money, but we are making it available to whatever clients we can help out.”
Venture Niagara has loans out to about 90 clients throughout Niagara, from Grimsby to Port Colborne.