Canadian Manufacturing

BDC launches program to support medium-sized businesses amid COVID-19

The program will be delivered working closely with businesses' primary lenders

June 19, 2020  by CM Staff

PHOTO: iStock

MONTREAL — BDC announced on June 18 the deployment of the Mid-Market Financing Program, part of the Government of Canada’s Business Credit Availability Program (BCAP).

The program will be delivered working closely with businesses’ primary lenders, and will include support for several sectors, including oil and gas, as previously announced.

Program details are as follows:

  • Loan sizes will range between $12.5 million and $60 million, available until or before September 30, 2020;
  • 90% of financing will be provided by BDC and 10% by the participating financial institution(s);
  • Four-year term, after which principal is to be repaid as a balloon payment;
  • Interest payments for the first 12 months will be capitalized and due at maturity.

“Since announcing this program, we have received positive feedback from medium-sized companies, demonstrating the demand for this type of credit solution to manage cashflow and activities,” said Michael Denham, president and CEO of BDC, in a prepared statement. “Many entrepreneurs are looking forward to the recovery and we hope that this initiative will provide them with the liquidity they need to adjust their operations and plan to emerge from this crisis.”

Advertisment

The Bank anticipates that qualifying companies will have annual revenues in excess of approximately $100 million and up to $500 million. These commercial loans will be a junior loan done jointly with the business’ primary lender or lending syndicate. To be eligible, businesses must have:

  • Been financially stable and viable prior to the current economic environment;
  • Been negatively impacted, directly or indirectly, by COVID-19 and/or the recent decline in oil and gas prices.

Interested medium-sized business owners are encouraged to speak with their primary lender who can assess if the program is appropriate for them. The primary lender will then communicate with BDC regarding next steps, including due diligence.