BDC launches additional COVID loan program for medium-sized businessesBy The IJ Staff | June 19 2020 02:30PM
Medium-sized businesses with cash flow needs because they have been negatively impacted by COVID-19 or the recent decline in oil and gas prices, can apply to their lenders for new junior loans being made available by the Business Development Bank of Canada (BDC).
The BDC announced late June 18 that it has deployed the new Mid-Market Financing Program, part of the Government of Canada’s Business Credit Availability Program (BCAP).
Intended to fund operational cash flow needs to ensure business continuity, loan sizes will range between $12.5-million and $60-million, and will be available until or before September 30, 2020. Under the program, 90 per cent of the financing will be provided by the BDC, while the remaining 10 per cent will be provided by participating financial institutions. The loans will be provided for a four-year term, after which the principal is to be repaid as a balloon payment. Interest payments for the first 12 months will be capitalized and due at maturity.
Qualifying companies will have annual revenues in excess of approximately $100-million, up to $500-million. The commercial loans, junior loans, will be made jointly with the business’ primary lender or lending syndicate. To be eligible, businesses must have been financially stable and viable prior to the pandemic. Interested medium-sized business owners are encouraged to speak with their primary lenders to obtain more information, who will then communicate with the BDC regarding next steps, including due diligence.