Loan and Grant Programs for Business Cash Flow During COVID-19
With the COVID-19 pandemic catching the world off-guard, many businesses that have been able to traditionally sustain themselves are now looking for new ways to access cash.
Navigating cash flow options during these uncertain times can be quite a challenge.
To support businesses through this transition, Mentor Works has put together a list of Canadian government funding programs that includes COVID-19-related support and ongoing government loan/grant programs.
Business Credit Availability Program (BCAP)
The federal government has allocated over $65 billion in business stimulus for Canadian companies seeking access to cash. The funding from this initiative will be provided by the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). Both BDC and EDC are working with private sectors to find credit solutions that will work for individual businesses, including the tourism, air transportation, and oil and gas industries.
Interest-Free $60K Loan for Small Businesses and Not-For-Profits
UPDATE: The Canada Emergency Business Account (CEBA) is now providing up to $60K in loans, and an additional $20K in loans to those who received the original $40K through the program. Read the latest information on CEBA.
The Canadian federal government has allocated $25 billion to the recently introduced Canada Emergency Business Account (CEBA), letting small businesses and not-for-profits apply for interest-free loans of up to $60,000 to help cover their operating costs during a period where their revenues have been temporarily reduced.
- Amount: Applicants may receive a repayable contribution (no-interest loan) of up to $60,000 with a loan forgiveness of 25% (up to $20,000) if the balance of the loan has been repaid on or before December 31, 2022.
Canadian small businesses and not-for-profits can contact their financial institution to apply for the CEBA loan. Deadline to submit an application is June 30, 2021.
Export Development Canada Business Credit Availability Program (EDC BCAP) Loan Guarantee
The EDC BCAP loan guarantee is offering qualified businesses up to $6.25 million in credit through their financial institution to cover rent, payroll, and other operating costs caused by the current crisis. This program has an 80% guarantee and is required to be repaid within one year.
Businesses that have been denied through BCAP now have support options through the Regional Relief & Recovery Fund (RRRF).
Learn more about government grants for Canadian exporters.
Business Development Bank of Canada (BDC) Co-Lending Program
The BDC is working with financial institutions to co-lend term loans to Canadian SMEs for their operational cash flow requirements. Eligible businesses may obtain incremental credit amounts of up to $6.25M through the program. The co-lending program will have a commercial interest rate, 10-year repayment period, and will be available through your primary financial institution.
Read the latest funding updates about the Business Development Bank of Canada (BDC).
Non-COVID-19-Related Government Funding Programs
Business Scale-up and Productivity (BSP) Program
The FedDev Ontario Business Scale-up and Productivity (BSP) program offsets upfront project costs and helps southern Ontario businesses grow more quickly.
- Amount:Â Applicants may receive a repayable contribution (no-interest loan) of up to 35% of eligible project expenses to a maximum of $500,000 to $10M.
- Eligibility:Â Must maintain profitable operations in southern Ontario for 2+ years, have more than 5 employees, and be an incorporated business or Indigenous organization.
- Project Examples:Â Commercializing/producing new innovative products, processes, or services; acquiring, adopting, or adapting innovative technologies; and late-stage technology development to support new markets and/or industrial applications.
Learn more about funding through the BSP program.
Community Economic Development and Diversification (CEDD)
The CEDD program, made available through FedDev Ontario, supports businesses undertaking projects that will improve their productivity, capacity, and competitiveness, resulting in increased employment and growth opportunities.
- Amount: Incorporated, for-profit businesses may receive a no-interest, repayable contribution from $250,000 up to $5M per project.
- Eligibility: Legally incorporated businesses, including Indigenous-owned businesses, with operations in rural areas of eastern and western Ontario.
- Project Examples: Adoption of new equipment; market development, diversification, and expansion; and facility improvement or expansion to support greater economic diversification.
Learn more about the FedDev Ontario funding provided through the CEDD program.
Receive a Maximum of $75K Through CanExport
Available to most established businesses looking to export, CanExport provides support for marketing and expansion activities involving new international markets. The program helps exporters improve their sales and brand exposure in international markets through marketing activities, packaging modifications, market research, and other initiatives.
- Amount: Canadian businesses may access up to 75% of costs associated with export marketing projects to a maximum $75,000 per application.
- Eligibility: 1-500 FTEs on payroll, $100,000-$100M in annual revenue, 1+ years incorporated with taxes filed, and project expenses must be at least $20,000. The applicant’s sales must be under $100,000 (or less than 10% of total sales) in the target export market over the previous 24 months.
- Project Examples: The CanExport SMEs program is not currently approving travel or event-related project costs due to the COVID-19 crisis. Many other categories of market development activities remain eligible, including marketing tools creation, IP protection, and market research.
Learn more about funding updates from the CanExport program.
Farm Credit Canada (FCC)
Farm Credit Canada has received $5B from the federal government to extend their lending capacity to agri-businesses facing financial hardships due to COVID-19.
Farm Credit Canada is contributing the following for agri-businesses, producers, and food processors:
- Deferral of principal payments up to 12 months; or
- Deferral of principal and interest payments up to six months for existing loans; and
- Access to an additional 24-month credit line up to $500,000 at a rate of Prime +1% and no fees, secured by general security agreements.
FCC is asking existing customers to contact their FCC relationship manager.
Read our full blog on agri-business support during COVID-19.
Apply for COVID-19 Loan and Grant Programs
Take the next step and find out if your business is applicable for Canadian government loan and grant programs related to COVID-19. The team at Mentor Works will match your business with available government funding programs and assist you throughout the application process.
View the latest COVID-19 funding program updates on our support page or register for a free COVID-19 business support webinar to learn about the latest funding updates.
 
COVID-19 Government Support Program Webinars
Updated: May 21, 2020
Hello,
Is there any assistance for new start ups that have not been in business for a year yet. My son opened a business February purchased all the equipment and had several business lined up. This was a DJ/Lighting Production company. All of his gigs have either been cancelled or postponed. No revenue no cash flow only equipment debt. Can you advise is there is any support for these kinds of situations?
Hi Eadie – Thanks for reaching out. There are several financing and support options available through the banks and financial lending institutions. Please refer to the Business Support options on Canada.ca for a list of specific support options.
I am a women that owns outdoors business in a rural area, that has yet to be open for a full year yet. Is there any grants out there for myself?
Hi Emily – As a business owner, you have several program to evaluate, including CEBA and BCAP. More information for those programs is available on Canada.ca’s Economic Response Plan Page. Stay well and all the best.
All of my companies s;ring shut down work has been cancelled or postponed due to Covid. I am a mechanical and welding company and I am also a safety consulting officer. I pay myself in dividends therefore I do not qualify for the existing CERB programs. Is there any assistance for my company to keep me afloat. Thank you.
Thanks for the question. We would recommend that you talk to your bank about financing options, including the BCAP program, as well as review our COVID-19 Income Support Options Infographic to explore your options during this time. The federal government also continues to announce new measures for supporting Canadian businesses throughout COVID-19, so please check our blog regularly and subscribe to our newsletter for the latest updates.
Hi.
I am starting my business from July. I am foreigner with no visa. Do I have any grants or loan available ?
Hi Bijay – As it turns out, the majority of government funding programs we discuss are reserved for established businesses with 15+ employees and other key eligibility factors. For smaller and/or younger organizations and entrepreneurs, we recommend referring to our Startup Resources Page. All the best!
Hello,
I registered my recording, mixing and mastering business earlier this year.
I have just had a new studio built to facilitate my small business.
Due to Covid-19, there have been long delays, material shortages and massive building material price increases.
These ‘covid’ related building material price increases have more than doubled my material cost!
Is there anything available to small businesses like mine, who are out many thousands of extra dollars due to the pandemic?
Thanks so much!
Hi Dave – If you are an established business in Ontario, we would recommend exploring some of the programs listed in this article, in addition to FedDev Ontario’s Regional Relief & Recovery Fund (RRRF). However, we would also recommend you explore the Startups Resources listed on our website as well, as there could be additional cash flow sources relevant to you in that list. All the best. All the best.
Hi there, we are a small to medium Events company based in Alberta but hosting events across North America, naturally with COVID-19 ALL of our events and therefore revenue sources have been cancelled, we have been able to access the CEBA loan and the newly updated Alberta Relaunch Grant, but it barely covers the out of pocket costs we have incurred with the loss of revenue, I see there is an Ontario specific events grant, but do not see any national schemes, do you know what the best course of action might be?
Hi Karl – We’ve created a comprehensive list of COVID-19 funding & support options for Canadian businesses, which we encourage you to check out for your events company.