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

Dog locks out Kelowna couple on 4th floor patio

Kelowna firefighters were called in to rescue the two people

Okanagan and Shuswap MPs want federal funds to help stop invasive species

Concerns raised that spending favours Eastern Canada.

Regional District of the Central Okanagan supports North Westside governance study

The RDCO will write a letter of support for the community’s restructure planning grant application

Liberals push NDP for fall school reopening plan

Local Liberal MLA says NDP government committed to plan being unveiled before Aug. 4

YouTubers claim to be Kelowna display toilet ‘poopers’

RCMP can not speak to legitimacy of video, will be investigating

Horgan says B.C. restart making gains as more people come out of their homes

B.C. announced the easing of more restrictions on businesses, recreation and travel last month

Conservationists raise concerns over state of care for grizzly cubs transferred to B.C. zoo

‘Let them be assessed now before their fate is sealed,’ urges B.C. conservationist Barb Murray

B.C.’s COVID-19 job recovery led by tourism, finance minister says

Okanagan a bright spot for in-province visitor economy

Shuswap resident calls RCMP about vehicle with U.S. licence plates

Police summoned on July 4 regarding car parked with California plates

Homeowners arrive in North Shuswap to find thieves busy breaking in

Chase RCMP request assistance from public in tracking down suspects

Ryga Arts Festival to include virtual and in-person events

Arts festival in Summerland will run from Aug. 15 to 23

National Kitten Day aka the ‘purrfect’ day to foster a new friend

July 10 marks National Kitten Day, a special day to celebrate all things kittens

Haida matriarchs occupy ancient villages as fishing lodges reopen to visitors

‘Daughters of the rivers’ say occupation follows two fishing lodges reopening without Haida consent

Driver in Shuswap observed vomiting after crashing vehicle, then running

Chase RCMP say woman was impaired, given 90-day driving prohibition

Most Read