BDC ready to roll with loans for mid-sized firms
Companies hit hard by COVID-19 can get up to $60M from government
Ottawa—mid-sized Canadian businesses that are strapped for cash because of COVID-19 can now apply through their own banks to get loans of up to $60 million from the federal government.
The loans, to be administered by the Business Development Bank of Canada, are part of a package of federal credit programs Finance Minister Bill Morneau promised in late March.
The federal government had initially planned programs specific to oil and gas, which were facing particularly tough times as global demand for oil plummeted during the pandemic-induced economic slowdown at the same time as Russia and Saudi Arabia faced off in a production war that sent oil prices into a tailspin.
However, the Business Development Bank of Canada has now merged the oil and gas program with one for other companies, to create a single midsized business loan program for any company, in any sector, that meets the qualifying terms.
That includes companies with revenue between $100 million and $500 million that were financially viable before the pandemic, but saw their operations negatively affected by the economic shutdown or falling oil and gas prices.
Loan amounts will fall between $12.5 million and $60 million, with the Business Development Bank of Canada covering 90 per cent and a company’s own financial institution the rest. The BDC advises companies interested in the program to reach out directly to their main financial lender and work with them to determine if the program is a good fit and how to proceed.
Applications will be open until the end of September.
Ben Brunnen, the vice-president of fiscal and economic policy for the Canadian Association of Petroleum Producers, said this week the loan programs had the potential to help struggling companies, but that there was frustration and anxiety in the oil sector at how long it was taking to begin.
Oil prices fell to never-beforeseen lows in April, briefly trading in negative territory, meaning oil producers were paying others to take their oil away.