Dankr.ca – Your Toronto Connection
Article by Saira Peesker, Globe and Mail
Many Canadian companies are keen to tap into the federal government’s business credit availability program, created this month to provide emergency financing to businesses affected by COVID-19. But entrepreneurs in the cannabis sector and bar owners are among those discovering they may not be eligible for BCAP’s loans.
The $10-billion allotted for the program will flow through the Business Development Bank of Canada and Export Development Canada, working alongside Canada’s mainstream financial institutions. The money adds to another round of support for small businesses announced Friday: billions in wage subsidies and $95-billion more in loans and tax deferrals, including a $20-billion co-lending program pairing BDC with other financial institutions.
While the Department of Finance website promises “BCAP will support access to financing for Canadian businesses in all sectors,” BDC assistant vice-president Shawn Salewski says only “businesses that qualified for BDC financing prior to the downturn” will be eligible for funding from that organization.
That excludes “businesses that operate as stand-alone nightclubs, bars, lounges, cabarets, casinos, discotheques, video arcades, pool and billiard halls,” and those that are “inconsistent with generally accepted community standards of conduct and propriety,” according to the organization’s website. Companies must also be at least two years old.
Matt Grande, who co-owns Mosaic Bar in Hamilton, says it’s unlikely the business will last more than two months of shutdown without support. “We’re less than a year old and we still have debts from when we were starting up.”
Dan Sutton, chief executive officer of B.C. cannabis producer Tantalus Labs, says BDC has long been unwilling to work with cannabis growers, and that a BDC senior account manager recently told him that will continue with the COVID-19 funding. He believes that without support, many companies will fail, bolstering the illicit market the legal industry was meant to replace. “It could lead to massive supply shortages and would likely take years to build back,” he said.
