As COVID-19 continues to affect businesses throughout the country, small businesses are taking a substantial hit. Many resources are now available to aid employers and workers experiencing financial difficulty resulting from the pandemic to help pay for daily expenses, including payroll, rent, products, and other bills and obligations.

Small Business Loans in Canada

This list represents several financial solutions for small to mid-sized enterprises, including small business loans in Canada. Financial resources and support shared here may be subject to change.

Canada Emergency Business Account (CEBA) Interest-Free Loans

The CEBA program provides small business loans in Canada of up to $40,000 to groups without a business bank account that have reduced revenue due to COVID-19 and ongoing costs, such as rent, insurance, and taxes. Not-for-profits are also eligible. The deadline to submit a CEBA application is December 31, 2020.

• CEBA allows for loan forgiveness of up to $10,000 or 25%. To receive this benefit, businesses must repay their loans in full by December 31, 2022.
• Applicants must meet a payroll eligibility range of $20,000 to $1.5 million.
• Applicants can submit requests for CEBA support through their credit unions or banks.
• CEBA has an extended eligibility period to allow more small businesses in Canada to qualify and submit applications, including:
  • Family-owned enterprises
  • Businesses with contractors and or employees
  • Sole-proprietors
  • Family businesses that pay workers through dividends

For additional information about this loan program, call 1-888-324-4201 to speak with a representative at the CEBA Call Centre.

Loan Guarantee for Small and Medium-Sized Businesses

Export Development Canada (EDC) has a partnership with multiple financial institutions to guarantee 80% of new employer credit and term loans of up to $6.25 million. The money will provide relief to small and mid-size enterprises to cover daily operating costs, including payments to suppliers and inventory purchases. Qualifying employers can apply for the loan guarantee through credit unions and banks across Canada.

With this program:

• Financial institutions will determine the size of the loan or credit limit.
• Both exporting and non-exporting companies may apply.
• Six-month deference may be available for small credit amounts.
• Businesses don’t have to export their sales to meet qualification requirements.
• The loan guarantee will not apply to:
  • Not-for-profits
  • Unions
  • Registered Charities

Support for Women Entrepreneurs

Vancity, in partnership with the Women’s Enterprise Centre, is supporting women entrepreneurs and business owners who are coping with the effects of the pandemic. In addition to business loans, the program also provides services from the Women’s Enterprise Centre to help women entrepreneurs navigate the pandemic’s business landscape, including financial management resources and online educational courses.

The Vancity Unity Women Entrepreneurs Loan:

• Offers loans of up to $150,000 for female business owners who have been in business for at least two years
• Extends eligibility to corporations, sole proprietorships, and partnerships
• Allows for principal repayment at any time
• Interest-free for six months, with an option for the next six-month payment period to consist solely of interest

Business Credit Availability Program (BCAP)

The BCAP program helps businesses of all sizes across every sector and region get financing during the pandemic. The deadline to apply for assistance is June 2021, and applicants can request relief or a new credit line at various banks and credit unions.

Under this program, business owners can apply for several relief options:

• BDC (Business Development Bank of Canada) Financing
  • Loans of up to $2 million for businesses experiencing a direct or indirect effect of the COVID-19 pandemic
  • Flexible repayment plans for qualifying applicants
  • Small business loans of up to $100,000 for enterprises that have been in operation for a minimum of 24 months and consistently generate revenue
• Co-Lending Program
  • Provides loans to small and mid-sized enterprises with the BDC and Federal government as co-lenders
  • Business revenue determines loan amounts
  • All legal businesses are eligible, including lounges, cannabis dispensaries, and bars

Black Entrepreneurship Program (BEP)

The recent launch of this program aims to assist Black Canadian small business owners and entrepreneurs who need help recovering from the effects of the pandemic and further assistance growing their businesses. Investments from the Canadian government and financial institutions are funding the program for the next four years.

Part of the program is the Black Entrepreneurship Loan Fund. The fund will provide loans of up to $250,000 for qualifying Black business owners in Canada. The government is receiving additional support through financial partnerships with BMO Financial Group, Scotiabank, and others to offer continuous relief to qualifying applicants.

Regional Relief and Recovery Fund (RRRF)

The RRRF fund consists of $1.5 billion for businesses and organizations within various sectors, including tourism, manufacturing, and technology, to mitigate pressure from companies and communities struggling to deal with and recover from the pandemic. It specifically targets entities that may not have access to other relief measures.

The loans for which qualifying businesses can apply from the RRRF include:

• Business within the Community Futures network
  • Small and medium-sized businesses in rural communities can receive loans of up to $40,000 without interest.
  • The program will forgive up to $10,000 if the business repays its loan before December 31, 2022.
  •  Qualifying parties include social enterprises, sole proprietorships, and partnerships.
• Businesses outside the Community Futures network
  • Loans of up to $40,000 are available without interest.
  • Up to $10,000 is forgivable if the borrower repays the loan before December 31, 2020.
  • Not-for-profits and sole proprietorships aren’t eligible.
• Funding assistance over $40,000
  • Interest-free loans can max out at $1 million with no monthly repayments until after December 31, 2022.

Support for Indigenous Businesses

Small business loans in Canada are available for Indigenous business owners through several avenues. The Government of Canada allocates up to $306.8 million for interest-free loans for Inuit, Métis, and First Nations businesses. 

• Small and medium-sized businesses can receive up to $30,000 in loans in addition to a $10,000 non-repayable contribution for a total of $40,000 relief money.
• Support comes from Aboriginal Financial Institutions, which is where business owners can apply for aid.

Small business owners within the Métis, First Nations, and Inuit communities can also seek aid from the Indigenous Community Business Fund by way of a proposal to strengthen their operations during the pandemic. The purpose of this fund is to position these businesses for recovery and to cover specific operating costs.

Grants and Resources for Small Businesses in Canada

Various organizations and the Canadian government offer grants and relief measures for small businesses that cannot pursue other financial pandemic assistance to take care of their operating costs, rental obligations, employee and contractor payments, and sanitation efforts.

Canada United Small Business Relief Fund

The Canada United Small Business Relief Fund aims to reimburse small local businesses for pandemic-related expenses, including physical renovations, e-commerce upgrades, and PPE purchases. Grant amounts can reach up to $5,000 for costs incurred from March 15, 2020, or later.

• Application submissions are available for all provinces and territories except Newfoundland, Manitoba, British Columbia, Ontario, Labrador, Saskatchewan, Alberta, and Nova Scotia.
• Medium-sized enterprises in every sector throughout Canada can apply as long as they have less than 75 employees.
• Annual sales for businesses must range between $150,000 and $3 million.
• To qualify, applicants do not have to be a member of the Ontario Chamber of Commerce (OCC).

Canada Emergency Wage Subsidy

This subsidy helps employers retain or rehire employees necessary to continue or resume daily operations. It provides wage assistance with a March 15 retroactive date for employers with reduced revenue due to the pandemic.

The program expects to continue until June 2021. Eligible businesses are ones that:

• Have a CRA account for payroll on March 15, 2020
• Don’t have a payroll account but have had remittances made by someone else on their behalf
• Purchased another person’s or partnership’s assets
• Have eligible revenue and employee earnings
• Includes:
  • Small businesses
  • Not-for-profit organizations
  • Corporations
  • Registered charities

Canadian Emergency Rent Subsidy (CERS)

Qualifying enterprises that are experiencing a drop in revenue from the COVID-19 pandemic may apply for and receive a subsidy to help cover a portion of their commercial rent or building expenses. Payments will go directly to eligible property owners and renters for Canadian charities, businesses, and not-for-profit organizations. The timeline for CERS is from September 27, 2020, until June 2021.

Eligibility for the base rental subsidy may also qualify businesses for lockdown support if their locations are under a public health order for at least a week.

To qualify for CERS support, businesses must meet one of the following conditions:

• The business must have a CRA number on September 27, 2020.
• The business must have had an active payroll account on March 15, 2020, or another party must have made remittances on its behalf.
• The business must have acquired another party’s business assets, and the party must fall into one of the two previous categories.

Other qualifications include:

• A drop in revenue
• Qualifying commercial business or land for the enterprise, not including personal residences

Small and Medium-Sized Business Recovery Grant

This grant opportunity provides $10,000 to $30,000 to businesses with two to 149 employees from B.C. that had a drop in revenue beginning March 10, 2020. The program seeks to help enterprises to remain open during and after the pandemic.

• Additional grants between $5,000 and $10,000 are available for eligible businesses within the tourism sector that experienced substantial financial hardship by COVID-19.
• The program will run until March 31, 2021, or until the program has allocated all monies to qualifying applicants.
• To qualify, businesses must have:
  • twelve months of payroll documents
  • Documentation proving revenue for the last 24 months
  • Tax documentation for the previous three years

In summary, if COVID-19 has affected your small business in Canada, the resources noted above should provide some financial assistance. 

At Group Enroll, we’re committed to helping small businesses succeed. In addition to taking advantage of loan and grant opportunities, you can provide support for your employees and potentially cut your operating costs by ensuring you’re getting the best possible coverage options and rate for your group benefits plan. We’re happy to help you compare quotes.