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

Snow could be seen Oct. 12 on Highway 5, near the Coquihalla summit. (Contributed)
It looks like an interesting winter folks

Winter will be colder than normal, with above-normal precipitation and below-normal snowfall

Paramedics transported a cyclist to hospital after he collided with a vehicle outside the Wendy’s at Penticton Plaza Tuesday, Oct. 20, 2020 (Jesse Day - Western News)
Truck collides with cyclist outside Penticton Wendy’s

Police are investigating the collision

Riders of all ages participated in 2019’s Axel Mercx Granfondo in Penticton, with over 1600 registering for 2020 before COVID-19 forced its cancellation. (Western News File)
Granfondo ‘Penticton’s best opportunity for an event in 2021’

The long-distance cycling event was cancelled this year after 1600 riders had already registered

FILE – People wait in line at a COVID-19 testing facility in Burnaby, B.C., on Thursday, August 13, 2020. THE CANADIAN PRESS/Darryl Dyck
167 new COVID-19 cases, 1 death recorded as B.C. enters 2nd wave

Three new healthcare outbreaks also announced

Surrey RCMP cruisers outside a Newton townhouse Tuesday night. (Photo: Shane MacKichan)
Toddler in hospital, woman dead following stabbings at Surrey townhouse

Police say two-year-old was among victims found at townhouse complex in the 12700-block of 66 Avenue

View of Larsson Hill from DriveBC camera at 7:25 a.m. on Oct. 21. (Contributed)
Vehicle incident at Larson Hill causing delays up to one hour on Coquihalla

The incident has blocked traffic in both directions

A Tim Hortons employee hands out coffee from a drive-through window to a customer in Mississauga, Ont., on March 17, 2020. Tim Hortons is ending the practice of double cupping hot drinks, a move the fast food restaurant says will eliminate hundreds of millions of cups from landfills each year. THE CANADIAN PRESS/Nathan Denette
The end of double cupping: Tim Hortons ditches two cups in favour of one with sleeve

Most recycling facilities in Canada don’t recycle single use paper coffee cups because of a plastic lining

Canada’s Chief Public Health Officer doctor Theresa Tam responds to a question during a news conference Tuesday October 20, 2020 in Ottawa. Canada’s chief public health doctor says in the age of social media, fake news about the COVID-19 pandemic has been spreading faster than the virus itself. THE CANADIAN PRESS/Adrian Wyld
VIDEO: Fake news creates serious issues for battling pandemic, chief public health doc says

Both Tam and Prime Minister Justin Trudeau urged Canadians to be responsible about the information they share

A 20-year-old man was pronounced dead following a three vehicle collision on Highway 1 west of Revelstoke Tuesday, Oct. 20, 2020. (File photo)
One dead after Highway 1 crash near Revelstoke

20-year-old man pronounced dead at the scene of a three vehicle collision west of Revelstoke

Steven Stuart Gardner has been charged with possession of a firearm contrary to an order and possession of a firearm without a licence. He has also been charged, under the Motor Vehicle Act, with driving while prohibited. (Crime Stoppers photo)
Car connected to shooting, dumped in Chase leads to unrelated arrest

Investigation of Kamloops shooting leads police to a rural Chase property

Volunteer registered nurse Stephanie Hamilton recieves a swab from a driver as she works at a Covid-19 testing site in the parking lot at Everett Memorial Stadium on Tuesday, Oct. 20, 2020 in Everett, Washington. (Andy Bronson / The Herald)
13 more COVID-19 cases in Interior Health region

There are 624 cases in the region since the start of the pandemic

The body of Natsumi Kogawa, 30, was found in the Gabriola Mansion on Davie Street, Vancouver, in September 2016. Vernon man William Schneider, who was found guilty of second-degree murder, now awaits the decision of his appeal hearing Monday, Oct. 19, 2020. (Vancouver Police Department photo)
No decision yet for Vernon man appealing murder sentence

William Victor Schneider was convicted in relation to Natsumi Kogawa’s death in 2016

Most Read