Chairs are turned upside down on the bar at a closed restaurant, amid concerns about the spread of the coronavirus, in Vancouver, on Tuesday, March 17, 2020. COVID-devastated bars and lounges as well as the country’s hard-hit cannabis sector will have access to $40 billion in new credit being made available via the government’s business bank, its CEO said on Sunday. THE CANADIAN PRESS/Darryl Dyck

Chairs are turned upside down on the bar at a closed restaurant, amid concerns about the spread of the coronavirus, in Vancouver, on Tuesday, March 17, 2020. COVID-devastated bars and lounges as well as the country’s hard-hit cannabis sector will have access to $40 billion in new credit being made available via the government’s business bank, its CEO said on Sunday. THE CANADIAN PRESS/Darryl Dyck

Bars, cannabis sector eligible for $40B credit program from government bank

Applicants must go through their own banks to access the program

Devastated bars and lounges as well as the country’s hard-hit cannabis sector will have access to $40 billion in new credit being made available via the government’s business bank during the COVID-19 crisis, its CEO said on Sunday.

In an interview with The Canadian Press, Michael Denham said the program from the Business Development Bank of Canada would now be open to all businesses.

“Any legal business is eligible to be part of the program — that was what I think some industry groups were concerned about,” Denham said from Montreal. “That was clarified and we’re going to formally announce it on Monday.”

Applicants must go through their own banks to access the program.

The business development bank is a federal corporation with a loan portfolio of about $35 billion. The $40-billion credit availability program will be in addition to that, Denham said.

Although it backstops higher risk loans than banks do, the Crown corporation does aim to be commercially viable. Those approaching their financial institutions for access to the program will have to show they would have been able to handle a loan before the coronavirus hit.

The development bank, which has about 60,000 clients, has been making other changes given the unprecedented impact of the pandemic, Denham said. It has lowered its interest rates, waived fees, and increased the amount of risk it is taking on with its loans.

“All these changes are meant to make ourselves as easy and accessible within the confines of BDC being a lender,” Denham said. “We’re doing what we need to do.”

Struggling businesses have been pressing for deferment of existing loan obligations as well as access to capital loans to help them weather the COVID storm.

The restaurant sector has been particularly hard hit by widespread closures governments and health authorities have ordered in an effort to curb the spread of COVID-19. A recent survey suggested almost one in 10 restaurants had already closed, and nearly one in five expected to close if conditions didn’t improve quickly.

READ MORE: Canada’s 75% wage subsidy is coming, but not for several weeks

The cannabis industry, which had been struggling pre-pandemic, has also had stores close, although online sales continue.

The development bank has seen a flood of new applicants in recent weeks. As many applications have come in via its online financing platform since the start of the crisis in mid-March as would normally be received in a full year.

“That’s indicative of the amount of demand and volume we need to need to deal with,” Denham said. “We’re organizing ourselves to be able to deal with that level of volume, because of the intensity of the crisis.”

Like many other Canadians, the development bank’s 2,300 employees were sent home on Friday, March 13. The organization reopened for business on the following Monday, with staff working remotely.

Meanwhile, applications for federal government relief benefits are expected to start flooding in Monday as people who have lost their jobs begin applying for emergency pay. Prime Minister Justin Trudeau said people would start getting their $2,000 a month within five days if they used direct deposit.

“My advice to all entrepreneurs: Understand the programs, talk to your bank, see what’s right for you, and take advantage,” Denham said.

Colin Perkel, The Canadian Press


Like us on Facebook and follow us on Twitter.

cannabisCoronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Hardeep Singh Sahota, the director of Royal Academy of Bhangra in Surrey, says there’s lots of confusion around the temporary closure of dance studios. He’s pictured in the empty studio, which shows spaced out dance areas, on Thursday, Nov. 26, 2020. (Photo: Lauren Collins)
‘Temporary’ closure causing confusion for Surrey dance studio

Bhangra academy director says studios need more guidance from healh authorities

Despite rumours, Surrey RCMP say they are not issuing tickets to people if they are driving in a vehicle with others from a different household. (File photo)
Rumours of vehicle-occupant address checks untrue, say Surrey RCMP

COVID-19 enforcement about education, says Cpl. Joanie Sidhu

FILE PHOTO - Surrey Mayor Doug McCallum speaks at a press conference about the provincial government approving the city’s municipal police transition plan Thursday (Aug. 22, 2019). He is joined by councillors (from left) Mandeep Nagra, Allison Patton and Doug Elford. (File photo: Lauren Collins)
LETTER: Surrey’s budget is despicable

Reader says Safe Surrey is going to bankrupt residents

B.C.’s parliament buildings in Victoria. (Photo: Tom Fletcher)
Surrey gets two cabinet ministers, a parliamentary secretary and government whip

Premier John Horgan’s NDP MLAs were sworn in on Tuesday and the cabinet was revealed Thursday afternoon

(Photo: Amy Reid)
VIDEO: 2020 Community Leader Awards recognize Surrey’s unsung heroes

They don’t often receive recognition and don’t necessarily have a high profile in the community

Alexandre Bissonnette, who pleaded guilty to a mass shooting at a Quebec City mosque, arrives at the courthouse in Quebec City on February 21, 2017. THE CANADIAN PRESS/Mathieu Belanger - POOL
Court strikes down consecutive life sentences; mosque shooter has prison term cut

The decision was appealed by both the defence and the Crown

Gold medallists in the ice dance, free dance figure skating Tessa Virtue and Scott Moir, of Canada, pose during their medals ceremony at the 2018 Winter Olympics in Pyeongchang, South Korea, Tuesday, Feb. 20, 2018. THE CANADIAN PRESS/AP-Charlie Riedel
Olympic champions Virtue, Moir and Tewksbury among 114 Order of Canada inductees

Moir and Virtue catapulted to national stardom with their gold-medal performances at the Winter Olympics in 2018

Shoppers line up in front of a shop on Montreal’s Saint-Catherine Street in search of Black Friday deals in Montreal, Friday, Nov. 27, 2020. THE CANADIAN PRESS/Paul Chiasson
Black Friday shopping in a pandemic: COVID-19 closes some stores, sales move online

Eric Morris, head of retail at Google Canada, says e-commerce in Canada has doubled during the pandemic.

Chilliwack school board trustee Barry Neufeld is taking heat over using a ableist slur to refer to three Black Press employees. (Paul Henderson/ Progress file)
BC School Trustees Association president keeps heat on Chilliwack Trustee Barry Neufeld

In a news release, Stephanie Higginson called on voters to take careful note of Neufeld’s behaviour

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

School District 27 announced the first confirmed case of COVID-19 this week (Nov. 23) at Lake City Secondary School Williams Lake campus. (Angie Mindus photo - Williams Lake Tribune)
Entire gym class at northern B.C. high school isolating after confirmed COVID case

Contact tracing by Interior Health led to the quarantine

Arthur Topham has been sentenced to one month of house arrest and three years of probation after breaching the terms of his probation. Topham was convicted of promoting hate against Jewish people in 2015. (Photo submitted)
Quesnel man convicted for anti-Semitic website sentenced to house arrest for probation breach

Arthur Topham was convicted of breaching probation following his 2017 sentence for promoting hatred

Langley School District's board office. (Langley Advance Times files)
‘Sick Out’ aims to pressure B.C. schools over masks, class sizes

Parents from Langley and Surrey are worried about COVID safety in classrooms

Most Read