Business Development Bank extends pandemic programs to include cannabis
The Business Development Bank of Canada (BDC) is expanding its lending services to include industries previously not covered by the institution’s programs, including the cannabis industry.
Initially, in order to mitigate the economic impacts of the COVID-19 pandemic, a select group of industries had been offered assistance in the program. However, on Monday, the bank announced that “all legal businesses will be eligible for the Business Credit Availability Program (BCAP), for the duration of the program.”
This includes access to the Canada Emergency Business Account and SME Loan and Guarantee program.
- See also:
“Businesses in the cannabis sector and the hospitality sector operating bars and lounges will now be eligible,” reads a release from the bank.
In March, the federal government established the Business Credit Availability Program (BCAP) to help Canadian businesses obtain financing during the pandemic and resulting economic downturn.
Through this program, Export Development Canada (EDC) and the Business Development Bank of Canada (BDC) is providing $65 billion in direct lending and other types of financial support to businesses with “viable business models” whose access to financing would otherwise be restricted, according to the Government of Canada.
“As part of the BDC co-lending program,” the bank wrote in its statement, “eligible businesses may obtain incremental credit amounts of up to $6.25 million, 80% of which would be provided by BDC, with the remaining 20% by the financial institution.”
Before the announcement on Monday, cannabis-licensed producers, specifically, were being directed to reach out to the Farm Credit Canada for support.
“Farm Credit Canada (FCC) is working with customers to offer loan payment deferrals and short-term credit products up to a maximum of $500,000 to assist with cash flow needs,” the agency wrote to Grow in a statement. “Businesses applying for FCC lending products will be subject to normal lending due diligence, which considers business viability, credit history, and management integrity and experience. In order to be eligible, businesses must have been financially viable entities prior to the impact of COVID-19.
Despite a surge in sales noted across the country near the onset of the pandemic, Ontario recently reversed its position on cannabis retail and producers being an “essential service,” and ordered their closure.
Follow Channels and Categories