The CEO of the Canadian government’s business bank announces that the hard-hit bars, lounges, and the cannabis industry now have access to $40 billion, owing to the COVID-19 crisis.
With the surge of the COVID-19 pandemic, the world has come to an indefinite standstill. The business development bank is open to provide help to all the business. It is Canada’s only bank that is exclusive for entrepreneurs and their businesses.
Michael Denham, the President, and CEO of the BDC, said in an interview with the Canadian Press, “Any legal business is eligible to be part of the program — that was what I think some industry groups were concerned about. That was clarified, and we’re going to formally announce it on Monday.”
With about 60,000 clients, the development bank has been making more changes as a result of the worldwide pandemic. Denham said that they have waived fees, lowered their rate of interest, and are taking more amount of risk with their loans.
The amount of 40 billion dollars is in addition to the already existing portfolio of 35 billion dollars.
According to the report, the applicants will have to access the credit through their own banks. Although the BDC gives out higher risk loans than the banks do, the Crown Corporation still aims to be commercially viable.
Businesses approaching the financial institutions for access to the special program will have to show and prove that they would’ve been able to pay back the loan before the pandemic hit.
The coronavirus storm has hit struggling business the worst. These businesses have been asking for access to capital loans and deferment of loan obligations in order to survive the catastrophic pandemic.
In order to prevent the spreading of the virus, the government was forced to take drastic measures resulting in challenging conditions for smaller businesses. The widespread closures ordered by the government and the health authorities, the restaurant sector is facing extremely challenging times.
According to a recent survey, it has been observed that one in ten restaurants has already closed down and one in five will be closing down in the near future.
Online sales of cannabis continue, however, physical stores have been closing down.
Like businesses all around the world, the bank’s 2,300 employees were sent home on Friday, March 13. The staff has been working remotely since the bank opened the following Monday.
Since then, a large number of people have applied to receive the benefit of the program. Since the onset of the crisis in mid-March, the bank has received as many online applications as they would typically receive in a year.
Denham said that the applications are indicative of the demand and the volume that the bank needs to deal with. He further added that they are trying to organise themselves in a way that they can deal with the number of applications and the level of volume due to the intensity of the crisis.
Denham said, “My advice to all entrepreneurs: Understand the programs, talk to your bank, see what’s right for you, and take advantage.”
On the other hand, a lot of people have lost their jobs and are applying for the federal government relief benefits to receive emergency pay. Justin Trudeau, the Prime Minister, said that if people used direct deposit, they would start receiving their 2000 dollars a month within five days.