SpringVelocity
Crew Member
Yes I am going to apply for CERB. I know the loan is very frustrating. They have also locked down the loan so it has to be spent on specific things.
COVID 19 - BUSINESS THREAD INFO/DISCUSSION
- Thread starter SpringVelocity
- Start date
Yes I am going to apply for CERB. I know the loan is very frustrating. They have also locked down the loan so it has to be spent on specific things.
Rain City
Crew Member
Like what?
SpringVelocity
Crew Member
https://www.maroofhs.com/post/canad...-for-small-businesses-during-covid-19-crisis/
I will see if I can dig up where I saw it but it looked like they were telling businesses what they could spend it on. Small business like mine owner/operator that pull salary without a payroll are disallowed.
(b) Who are eligible to get Canada Emergency Business Account (CEBA) loan?
Businesses must demonstrate that their total payroll cost for 2019 was between $50,000 and $1 million. Some of the common questions surrounding CEBA are:
Payroll condition has made access to CEBA difficult for businesses such as owner-managers and self-employed. There are other programs that the government has announced. BDC and EDC are both working with financial institutions to provide credit to small businesses. Details can be found here.
Are you a business that faced a drop of 30% revenue as compared to revenue for the same month in 2019? You might be eligible for 75% wage subsidy, get more details here.
Do you need a business plan or financial projections to get loan from your bank? Are you behind your corporate income tax filings and need to file back taxes? Contact us and let us help you!
Stressed out because of COVID-19 business slow down? Here are the things you can do, turn stress into positive energy and prepare yourself for recovery.
I will see if I can dig up where I saw it but it looked like they were telling businesses what they could spend it on. Small business like mine owner/operator that pull salary without a payroll are disallowed.
(b) Who are eligible to get Canada Emergency Business Account (CEBA) loan?
Businesses must demonstrate that their total payroll cost for 2019 was between $50,000 and $1 million. Some of the common questions surrounding CEBA are:
- What is the payroll threshold for CEBA eligibility? A business must be having a payroll account with the Canada Revenue Agency (CRA). During 2019, the business must have paid wages and salaries between $50,000 and $1 million.
- I pay subcontractors and issue T4A, is my small business eligible to get CEBA loan? No, you are an eligible business only if you pay salaries and issue T4s.
- I pay myself a salary from my corporation, am I eligible for a CEBA loan? It depends! If you have paid yourself a salary and a total of this salary is more than $50,000, yes your business is eligible to get this line of credit. Note dividends are different from salary.
- I am a home-based business (unincorporated) and I made more than $50,000 in 2019, am I eligible to get this business loan? No, you are self-employed. Self-employment income is not a payroll cost. If you have employees and you meet the payroll threshold, you are eligible.
- How to check what is the total payroll for our business in 2019? You can check it on T4 Information return for 2019 and look for Box 14.
Payroll condition has made access to CEBA difficult for businesses such as owner-managers and self-employed. There are other programs that the government has announced. BDC and EDC are both working with financial institutions to provide credit to small businesses. Details can be found here.
Are you a business that faced a drop of 30% revenue as compared to revenue for the same month in 2019? You might be eligible for 75% wage subsidy, get more details here.
Do you need a business plan or financial projections to get loan from your bank? Are you behind your corporate income tax filings and need to file back taxes? Contact us and let us help you!
Stressed out because of COVID-19 business slow down? Here are the things you can do, turn stress into positive energy and prepare yourself for recovery.
Rain City
Crew Member
If you paid yourself a salary you are eligible.
"I pay myself a salary from my corporation, am I eligible for a CEBA loan? It depends! If you have paid yourself a salary and a total of this salary is more than $50,000, yes your business is eligible to get this line of credit. Note dividends are different from salary."
SpringVelocity
Crew Member
I applied for the CERB after speaking with our accountant more. At least a little sigh of relief as that part gets taking care of. I am just going to watch this thing unfold if it hammers tourist season. If that happens my customers at store front locations will likely not order much during summer as they will be filled with inventory. May be time time to go back to work for someone a bit until it recovers, or re-tool to make some medical equipment. In my case lucky have something else I can do before. Most likely in company loss position for 6 months to pull any income as it stands , and also the missed revenue from new locations signed on. I think if I was set up as proprietor it would be worse. I think that is why they are announcing changed for people that are self employed with reduced incomes. That way those people won't fall through the cracks.
I won't be applying for the 40k loan. Thinking about it more not sure I feel comfortable about taking more debt as I don't know what Q3 and Q4 are going to look like. Rather be cautious.
It we be nice to see some grants from government instead of debt. I would love to see the government give some grants for manufacturers looking to help with buying equipment for making medical supplies etc. I could help locally if I had access to the right equipment.
Keep you guys in the loop seems things are changing every day.
I won't be applying for the 40k loan. Thinking about it more not sure I feel comfortable about taking more debt as I don't know what Q3 and Q4 are going to look like. Rather be cautious.
It we be nice to see some grants from government instead of debt. I would love to see the government give some grants for manufacturers looking to help with buying equipment for making medical supplies etc. I could help locally if I had access to the right equipment.
Keep you guys in the loop seems things are changing every day.
SpringVelocity
Crew Member
It excludes people' — why some say Ottawa's COVID-19 emergency loan program cuts them off
Health clinics, sole proprietors and tiny tech start ups among those who can't qualify for loans
James Dunne · CBC News · Posted: Apr 08, 2020 5:53 PM ET | Last Updated: April 8
Anna Malazhavaya, a tax lawyer with Toronto based Advotax Law says the CEBA loan program's rules make it hard for many legit businesses to qualify. (Alina Rahkman)
While Prime Minister Justin Trudeau announced changes Wednesday to broaden the criteria for access to the Canadian Emergency Wage Subsidy program many businesses owners are focused on another issue.
Some small businesses desperate to access the government's loan program known as the Canada Emergency Business Account (or CEBA) will not qualify for help under the program's criteria, according to experts.
"Absolutely it excludes people," says Anna Malazhavaya, a tax lawyer with Toronto based Advotax Law.
"If you don't get these loans and you can't qualify, says Alex Ghani, an accountant with CPA Solutions in Toronto, "you're in some serious trouble if your rent is due and you're given no relief for that."
Malazhavaya, Ghani and others are worried that the program is not fair to business owners who operate as sole proprietors with a small staff and low payroll expenses. They also note that small business owners who do not take a salary for payment because of how their businesses are set up, are not eligible for the program.
The CEBA loan program was first announced on March 27th and is intended to support small businesses struggling with the financial impact of COVID-19.
The $25 billion dollar program offers government backed loans of up to $40,000, interest-free until the end of 2022, and administered by the banks.
Canada has more than 1.1 million small businesses, employing about 8.3 million people and contributing roughly 40 per cent of Canada's entire economic output, according to the latest numbers from Statistics Canada.
Given just over half of the country's small businesses have only 1 to 4 workers, the relatively small $40,000 CEBA loan could be highly attractive.
The Canadian Federation of Independent Business thinks the program is an important tool to help "flatten the curve on small business failure," but in a statement CFIB executive vice-president Laura Jones said she's worried "people are falling through government eligibility cracks."
The payroll problem
One of the problems is that the loans require businesses to have paid out at least $50,000 in salaries last year. That could exclude some self-employed people and other sole proprietors.
The CFIB is calling on the government to eliminate the payroll test and make it accessible to more businesses, for that exact reason.
Ghani believes that requirement will hurt many businesses suffering the consequences of COVID-19.
"The biggest concern I find is the sole proprietor or the unincorporated individual who gets no access," says Ghani.
The issue here is sole proprietors earn and declare business income as opposed to salary, and they may not have any employees on the payroll or a very small payroll.
Even if they could get the government's wage subsidy, that does not help pay other operating expenses.
One of the biggest problems with the loan program is that it punishes businesses that don't have enough salary costs, and instead distribute income through dividend income or sole proprietorships. (Advotax Law)
Malazhavaya analyzed what types of businesses qualify for each government support program in the chart above, explaining the rules as of the time of publication. She says the program is not also fair to individuals who have incorporated their business, but pay themselves through dividends instead of a salary.
Consultants, engineers, and shopkeepers are examples of business owners that can incorporate and pay themselves with dividends.
For the next six months, any revenue plans we had are out the window
- Bocar Dia
On top of excluding individuals who pay themselves in business income or dividends,
Malazhavaya also thinks the minimum payroll requirement should be eliminated.
"If we target small businesses with the CEBA loan program, why do we have this lower limit of $50,000 payroll?" she asks.
- I'm phobic of debt': Small business owners not in love with federal government's emergency loans
- Government boosts wage subsidy to 75% for small, medium businesses to avoid layoffs during COVID-19 crisis
For many that means their salary expenses are too low to qualify for a CEBA loan.
Yet, in the midst of the pandemic, many of these same businesses have been forced to close and are left with little or no income to cover operational expenses that are still accumulating, even if some costs are being deferred.
It doesn't sit well with Malazhavaya that businesses like daycares, florists and coffee shops who need the CEBA loan can't be enrolled.
"A lot of times those are the types of businesses who get hit the hardest during a crisis."
- Business owners fear it will take years to recover from COVID-19 pandemic — and many may not make it
While a key issue that remains to be resolved is how fast money can be doled out to those who apply, here are four businesses who do not qualify for CEBA loans.
Case studies in crisis
Peak Physio and Sports Rehabin Toronto just opened in September of last year and had yet to break even when forced to close by the pandemic.
Revenue is now at "pretty much zero," says Co-Owner Joanna Habbous. "Definitely the $40,000 loan interest free would be a huge help."
She and her partners would use it to help cover expenses that are more than $11,000 a month (including the rent the trio personally guaranteed).
The problem: The owners are all contractors and they can't access CEBA becausePeak's only salaried staff member did not earn $50,000 in 2019.
Joanna Habbous of Peak Physio and Rehab says her business doesn't qualify for the CEBA loan because its sole salaried employee made less than $50,000 last year. (Joanna Habbous)
Edmonton's Tammy Deren, owner of The Photography Studio, is excluded from CEBA as a self proprietor with no payroll.
Deren collects business income from renting her three studio spaces out to other photographers and video producers, and for events.
Her business came to a standstill when social distancing orders forced her to close.
"It breaks my heart to have to shut something down that so much creativity thrived in, mere weeks ago."
If she could qualify for CEBA Deren could pay her rent and other costs.
"I paid my April 1 overhead," says Deren "but will most likely have to close my doors if nothing happens before May 1."
Tammy Deren says her photography studio will have no choice but to close its doors unless she finds a way to keep it afloat by May 1. (Moments in Digital)
SpringVelocity
Crew Member
300 kilometres down the highway from Deren in Calgary, Jeff Mottle is anxious about his business.
He founded CG Architect almost 20 years ago.
It'san online magazine and resource hub for architects and designers who specialize in 3-D illustrations.
He's seen tough times before but COVID-19 has taken his revenue "completely to zero."
Mottle can't access the CEBA program becausehe takes dividends from his company's revenue and cannot show a $50,000 payroll.
Prior to the pandemic, Jeff began a relaunch of his site, hiring web developers, writers and consultants. He spent much reserve funds and still owes tens of thousands for the work.
Mottle says a $40,000 interest-free loan "could be the difference between surviving by the skin of my teeth and going under."
COVID-19 has taken business owner Jeff Mottle's revenue completely to zero. (Alessandro Michelazzi)
In Vancouver, a tiny tech start up faces another version of the payroll problem.
Aplayris an online platform to help tech start-ups hire and manage sales people, especially when they are rapidly scaling up.
Co-founder Bocar Dia says COVID-19 hit the business hard and fast. as customers hit pause and hiring freezes took hold in the tech sector.
"For the next six months, any revenue plans we had are out the window."
Aplayr can't access CEBA because it was only incorporated in December last year.
Dia and his partner have raised money and are putting in sweat equity and capital.
'For the next six months, any revenue plans we had are out the window,' tech entrepreneur Bocar Dia says. (Thanyarat Photography)
They're not taking any salary and have no payroll though they have hired multiple contractors for projects.
For Dia a $40,000 loan could help them "frankly, survive as a company."
Otherwise, one stark option is "shut down operations and see what happens."
'We need businesses to survive'
When the Prime Minister announced the changes to the CEWS program, he spoke of the broad intent of government aid.
"If our economy is to get through this, we need businesses to survive and workers to get paid."
Small businesses not qualified for the CEBA loans hope changes are coming in time to help them. Tax lawyer Malazhavaya says all these legitimate small businesses pay taxes and contirbute to society and the economy so the way someone structured their business should not be a barrier to accessing an emergency loan program.
"I'm talking businesses who are about to go bankrupt because they can't pay their rent," says Malazhavaya "that employer subsidy is not going to help them. What they need is a loan."
Ghani agrees. "They should open it up," he says, "You know, don't limit them, they need their help. Right now they're struggling, your entire economy shut down."
Dia adds small businesses are at the centre of the big picture.
"These are the times where, you know, you should rely on your creative people the most and also support them the most, because these are the guys that are going to be ... driving the economy once it restarts."
CBC's Journalistic Standards and Practices|About CBC News
He founded CG Architect almost 20 years ago.
It'san online magazine and resource hub for architects and designers who specialize in 3-D illustrations.
He's seen tough times before but COVID-19 has taken his revenue "completely to zero."
Mottle can't access the CEBA program becausehe takes dividends from his company's revenue and cannot show a $50,000 payroll.
Prior to the pandemic, Jeff began a relaunch of his site, hiring web developers, writers and consultants. He spent much reserve funds and still owes tens of thousands for the work.
Mottle says a $40,000 interest-free loan "could be the difference between surviving by the skin of my teeth and going under."
COVID-19 has taken business owner Jeff Mottle's revenue completely to zero. (Alessandro Michelazzi)
In Vancouver, a tiny tech start up faces another version of the payroll problem.
Aplayris an online platform to help tech start-ups hire and manage sales people, especially when they are rapidly scaling up.
Co-founder Bocar Dia says COVID-19 hit the business hard and fast. as customers hit pause and hiring freezes took hold in the tech sector.
"For the next six months, any revenue plans we had are out the window."
Aplayr can't access CEBA because it was only incorporated in December last year.
Dia and his partner have raised money and are putting in sweat equity and capital.
'For the next six months, any revenue plans we had are out the window,' tech entrepreneur Bocar Dia says. (Thanyarat Photography)
They're not taking any salary and have no payroll though they have hired multiple contractors for projects.
For Dia a $40,000 loan could help them "frankly, survive as a company."
Otherwise, one stark option is "shut down operations and see what happens."
'We need businesses to survive'
When the Prime Minister announced the changes to the CEWS program, he spoke of the broad intent of government aid.
"If our economy is to get through this, we need businesses to survive and workers to get paid."
Small businesses not qualified for the CEBA loans hope changes are coming in time to help them. Tax lawyer Malazhavaya says all these legitimate small businesses pay taxes and contirbute to society and the economy so the way someone structured their business should not be a barrier to accessing an emergency loan program.
"I'm talking businesses who are about to go bankrupt because they can't pay their rent," says Malazhavaya "that employer subsidy is not going to help them. What they need is a loan."
Ghani agrees. "They should open it up," he says, "You know, don't limit them, they need their help. Right now they're struggling, your entire economy shut down."
Dia adds small businesses are at the centre of the big picture.
"These are the times where, you know, you should rely on your creative people the most and also support them the most, because these are the guys that are going to be ... driving the economy once it restarts."
CBC's Journalistic Standards and Practices|About CBC News
Stizzla
Crew Member
I’m glad people are making their voices heard. Thanks for sharing this!
I’m structured in a way that I do not qualify for this loan and it would help greatly. Today is my day for CERB and if I don’t get accepted then I’m getting nothing from the government and will have to use other debt (like credit card) to pay mortgage and grocery bills.
How do they I propose I will be able to buy that 2020 Persuit 325 OS I’m looking at?!
I’m structured in a way that I do not qualify for this loan and it would help greatly. Today is my day for CERB and if I don’t get accepted then I’m getting nothing from the government and will have to use other debt (like credit card) to pay mortgage and grocery bills.
How do they I propose I will be able to buy that 2020 Persuit 325 OS I’m looking at?!
wildmanyeah
Crew Member
Pretty much everyone I know has been successful at getting their mortgage deferred
Stizzla
Crew Member
Still have to pay interest (50%) and then the payments go up when you have to start paying it again.
SpringVelocity
Crew Member
Not at my bank. I am sure everyone is different.
SpringVelocity
Crew Member
I had to raise my credit card to cover some business expenses ( not all). It is really ****** system as it stands right now.
The loan system is completely unfair, and the government needs to address it with us little guys. Kind of hard when you hear other businesses are getting free 10k not to pay back + wage subsidies. If small businesses can't get a loan or wage subsidy how does that help the small businesses government said they would help?
Stizzla
Crew Member
I just looked into the deferral with my new mortgage provider (Scotiabank) and their service here is better than some...
Up to 6 months with no payments at all, but interest accrues and gets added on over the rest of the term, so payment will be higher and more interest will be paid in the end but it helps with cash flow for now.
SpringVelocity
Crew Member
Yes at least it is an option.
SpringVelocity
Crew Member
I don't know. Probably your local MP first.
wildmanyeah
Crew Member
Yes it’s a great option and really over the long term it’s really not much I might add a few months more at the end of your term.
If it means paying off cc debt well worth it.
SpringVelocity
Crew Member
Six-week wait for wage subsidy may be too long for some businesses and their employees caught in coronavirus crisis
New system under Canada Revenue Agency will take weeks to hand out money, while Canadian banks could have done the job in 48 hours, say observers
Canada’s tight-knit group of large banks can be a well-oiled machine in times of crisis, and may have been the logical choice to administer the federal government’s $71-billion program to pay a 75-per-cent wage subsidy to help small and medium-sized businesses weather the coronavirus crisis.
Instead, Canada opted to build an entirely new system within the Canada Revenue Agency, and it is anticipated that payments won’t flow to business operators for six weeks, on top of the three weeks many have been closed with no wage subsidy at all.
The decision has drawn criticism from business groups, including the Ontario Chamber of Commerce, whose officials say the wait is far too long to avoid layoffs on a scale that economists suggest will leave many businesses unable to operate once the economy restarts.
“I recommend the banks (do it),” Ruffolo said. “They could have done it in 48 hours.”
Canada’s Big Five banks would be the “best distribution channel” for the new program because it could be carried out simply through “know your client” processes already in place for bank customers, said Ruffolo, who is also former chief executive of OMERS Ventures, a unit of one of the country’s largest pension funds.
Since any portion of loans granted to cover wages would be backstopped by the government and forgiven, the banks would not even need to perform credit adjudication, he said.
The scope is so different from 2008 and 2009. This is an elephant — the government — sitting on the economy
Mitch Frazer, Torys LLP
In the United States, hundreds of large and community banks have been tapped to deliver similar wage-related aid for small businesses. Although there have been some early backlogs and complaints, payments are already flowing under the eight-week US$349-billion program backed by the U.S. Treasury and approved by Congress last week.
Treasury Secretary Steven Mnuchin took to Twitter Friday morning to say the system was up and running and that community banks in the U.S. had already processed more than 700 loans for US$2.5 million.
The 12-week Canada Emergency Wage Subsidy, unveiled last week, boosted a previously planned 10-per-cent wage subsidy with a promise to cover 75 per cent of a worker’s pay up to $847 a week. It is for firms that have lost 30 per cent of revenue or more and retroactive to March 15, though it could be May before the money is disbursed.
The Canadian Federation of Independent Business polled businesses and released survey results Monday that show just 29 per cent of firms say the program will help them avoid further layoffs or recall staff.
Mitch Frazer, chair of the pensions and employment practice at law firm Torys LLP in Toronto, said Canada’s big banks may have been a logical choice to manage the payroll subsidy system, as they were efficient in handling aspects of the financial crisis a decade ago.
But he noted the banks are already swamped with new, time-consuming work resulting from the pandemic and resulting business shutdowns, including responding to large volumes of business and retail clients who are suddenly unable to service their debts such as mortgages.
“I just don’t think it’s practical. I think what people are looking at is, in an ideal world, who can deliver this most efficiently … (but) this is an unprecedented economic event,” Frazer said, noting that 44 per cent of Canadians reported two weeks ago that they had at least one family member out of work.
“The scope is so different from 2008 and 2009,” he added. “This is an elephant — the government — sitting on the economy.”
Frazer said the decision to create the wage subsidy system within the CRA, rather than using the banks, may also have been the result of horse-trading as the government divvies up the responsibility for managing different aspects of the crisis.
He said he believes the wage subsidy program is workable, even if it takes longer without the banks. Since the money is guaranteed by the government and will eventually flow, it gives businesses and their employees some comfort to make decisions and cut deals with landlords, he added.
As well, some businesses will be able to tap an interest-free emergency loan of up to $40,000 to help them bridge the gap until they receive funds through the emergency wage subsidy program.
“You can use the loan to pay for the payroll costs and then get reimbursed,” Frazer said, adding that he has seen no prohibition on tapping these emergency funds to pay employees.
However, he noted businesses that don’t have a payroll of between $50,000 and $1 million won’t qualify for the emergency loan, of which $10,000 is forgivable if the rest of the loan is repaid by the end of 2022.
Frazer said he believes the government is working with financial institutions, the Business Development Bank of Canada and Export Development Canada, to establish more loans to help businesses beyond the funds and guarantees available under the two previously announced multi-billion-dollar programs.
The big banks are already part of those programs and Canada’s six largest banks have said they will give temporary relief to hard-hit credit card customers, including lowering interest rates, something the federal government is understood to have been pushing for.
“It is my understanding that there will be (more loans) from the BDC and EDC, but (I’m) not sure about what the details are yet,” Frazer said.
• Email: bshecter@nationalpost.com | Twitter:
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New system under Canada Revenue Agency will take weeks to hand out money, while Canadian banks could have done the job in 48 hours, say observers
Canada’s tight-knit group of large banks can be a well-oiled machine in times of crisis, and may have been the logical choice to administer the federal government’s $71-billion program to pay a 75-per-cent wage subsidy to help small and medium-sized businesses weather the coronavirus crisis.
Instead, Canada opted to build an entirely new system within the Canada Revenue Agency, and it is anticipated that payments won’t flow to business operators for six weeks, on top of the three weeks many have been closed with no wage subsidy at all.
The decision has drawn criticism from business groups, including the Ontario Chamber of Commerce, whose officials say the wait is far too long to avoid layoffs on a scale that economists suggest will leave many businesses unable to operate once the economy restarts.
- Opinion: The Canada Emergency Wage Subsidy is the right tool for this crisis
- How to get the coronavirus-related benefits the government is offering you
- Canadian banks pause payments on 10% of mortgages as they field 500,000 requests for deferrals
“I recommend the banks (do it),” Ruffolo said. “They could have done it in 48 hours.”
Canada’s Big Five banks would be the “best distribution channel” for the new program because it could be carried out simply through “know your client” processes already in place for bank customers, said Ruffolo, who is also former chief executive of OMERS Ventures, a unit of one of the country’s largest pension funds.
Since any portion of loans granted to cover wages would be backstopped by the government and forgiven, the banks would not even need to perform credit adjudication, he said.
The scope is so different from 2008 and 2009. This is an elephant — the government — sitting on the economy
Mitch Frazer, Torys LLP
In the United States, hundreds of large and community banks have been tapped to deliver similar wage-related aid for small businesses. Although there have been some early backlogs and complaints, payments are already flowing under the eight-week US$349-billion program backed by the U.S. Treasury and approved by Congress last week.
Treasury Secretary Steven Mnuchin took to Twitter Friday morning to say the system was up and running and that community banks in the U.S. had already processed more than 700 loans for US$2.5 million.
The 12-week Canada Emergency Wage Subsidy, unveiled last week, boosted a previously planned 10-per-cent wage subsidy with a promise to cover 75 per cent of a worker’s pay up to $847 a week. It is for firms that have lost 30 per cent of revenue or more and retroactive to March 15, though it could be May before the money is disbursed.
The Canadian Federation of Independent Business polled businesses and released survey results Monday that show just 29 per cent of firms say the program will help them avoid further layoffs or recall staff.
Mitch Frazer, chair of the pensions and employment practice at law firm Torys LLP in Toronto, said Canada’s big banks may have been a logical choice to manage the payroll subsidy system, as they were efficient in handling aspects of the financial crisis a decade ago.
But he noted the banks are already swamped with new, time-consuming work resulting from the pandemic and resulting business shutdowns, including responding to large volumes of business and retail clients who are suddenly unable to service their debts such as mortgages.
“I just don’t think it’s practical. I think what people are looking at is, in an ideal world, who can deliver this most efficiently … (but) this is an unprecedented economic event,” Frazer said, noting that 44 per cent of Canadians reported two weeks ago that they had at least one family member out of work.
“The scope is so different from 2008 and 2009,” he added. “This is an elephant — the government — sitting on the economy.”
Frazer said the decision to create the wage subsidy system within the CRA, rather than using the banks, may also have been the result of horse-trading as the government divvies up the responsibility for managing different aspects of the crisis.
He said he believes the wage subsidy program is workable, even if it takes longer without the banks. Since the money is guaranteed by the government and will eventually flow, it gives businesses and their employees some comfort to make decisions and cut deals with landlords, he added.
As well, some businesses will be able to tap an interest-free emergency loan of up to $40,000 to help them bridge the gap until they receive funds through the emergency wage subsidy program.
“You can use the loan to pay for the payroll costs and then get reimbursed,” Frazer said, adding that he has seen no prohibition on tapping these emergency funds to pay employees.
However, he noted businesses that don’t have a payroll of between $50,000 and $1 million won’t qualify for the emergency loan, of which $10,000 is forgivable if the rest of the loan is repaid by the end of 2022.
Frazer said he believes the government is working with financial institutions, the Business Development Bank of Canada and Export Development Canada, to establish more loans to help businesses beyond the funds and guarantees available under the two previously announced multi-billion-dollar programs.
The big banks are already part of those programs and Canada’s six largest banks have said they will give temporary relief to hard-hit credit card customers, including lowering interest rates, something the federal government is understood to have been pushing for.
“It is my understanding that there will be (more loans) from the BDC and EDC, but (I’m) not sure about what the details are yet,” Frazer said.
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wildmanyeah
Crew Member
Yeah it’s brutal that’s why companies were forced into layoffs. Till little to late
