Government of Canada announces additional support for medium and large businesses
To help save millions of middle-class jobs, the Government of Canada is taking additional measures to support businesses so that they in turn can keep workers on the payroll. The government is establishing the Large Employer Emergency Financing Facility (LEEFF) and is expanding the Business Credit Availability Program (BCAP), which was established as part of Canada’s Economic Response Plan.
About the new Large Employer Emergency Financing Facility (LEEFF) program
For the country’s large employers whose needs are more than conventional financing can meet, the LEEFF program will provide bridge financing to help them stay operational and active through this pandemic. Plus, position them for a rapid recovery as soon as possible. Prime Minister Justin Trudeau has stressed that the LEEFF program is a bridge loan program, not a bailout. This program is new, and the details are still being solidified, but the following points have been firmly established.
The LEEFF program’s three objectives are:
- protect Canadian jobs, taxpayers and workers
- help Canadian businesses survive this downtown
- avoid bankruptcies of viable firms
However, the LEEFF program will not:
- be used to resolve insolvencies or restructure organizations
- finance companies that can manage without assistance
The LEEFF program’s guiding principles include:
- protecting taxpayers and workers through specific eligibility criteria
- fairness in distributing the financing across all eligible sectors consistently
- ensure timely support by applying a standard set of terms and conditions
- The program will require the cooperation of each applicant’s private sector lenders to ensure the financing remains focused on sustaining operations.
- The program will be open to large, for-profit businesses (except those in the financial sector), plus certain non-profit businesses.
- Eligible businesses and non-profits will generally have annual revenues of $300 or higher.
- To qualify, eligible businesses must seek at least $60 in financing, have significant operations or workforce in Canada, and not be involved in active insolvency proceedings.
Financial support through LEEFF will be delivered by the Canada Development Investment Corporation (CDEV), in cooperation with Innovation, Science and Economic Development Canada (ISED), and the Department of Finance.
Expanding the Business Credit Availability Program (BCAP) to help mid-size companies
The government of Canada is also expanding the BCAP to support mid-size companies that have larger financial needs with loans of up to $60 million per company, with guarantees of up to $80 million. Through this program, mid-market companies will be able to use the country’s financial institutions to find appropriate, effective, complementary solutions to fill their financial gaps. Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) will work with private lenders to support access for Canadian businesses in all sectors and regions.
Read the full release from Prime Minister Justin Trudeau to learn more about the LEEFF program.
Learn more about Canada’s COVID-19 Economic Response Plan.