Financial Options for Businesses- during COVID-19

Updated April 2, 2020

The government has defined a little more what measures they will be taking to help Businesses who are in need.  Here are some of the options that they have provides:

  • Major Banks:
    • Banks have agreed to work with Canadians and small businesses on a case-by-case basis to provide them assistance and help throughout the COVID-19 pandemic. What this means is that they may be able to provide you with some help with mortgage payments and loans.
    • What you need to do: You will need to contact your bank to find out what they can do for you.
    • What you need to know: It looks like they are deferring payments for now but are still charging interest which will essentially mean you are paying interest upon interest. It can also have consequences to the business credit. It may not be an ideal situation for most businesses as it could have more negative consequences later on.
  • Canada Emergency Wage Subsidy:
    • The government is launching and an employee wage subsidy for qualifying businesses of 75% and back dating this to March 15, 2020. Here are the details of the program.
      • The Canada Emergency Wage Subsidy would apply at a rate of 75 per cent of the first $58,700 normally earned by employees – representing a benefit of up to $847 per week. The program would be in place for a 12-week period, from March 15 to June 6, 2020.
      • Eligible employers who suffer a drop in gross revenues of at least 30 per cent in March, April or May, when compared to the same month in 2019, would be able to access the subsidy.
      • Eligible employers would include employers of all sizes and across all sectors of the economy, except for public sector entities.
      • For non-profit organizations and registered charities similarly affected by a loss of revenue, the government will continue to work with the sector to ensure the definition of revenue is appropriate to their circumstances. The government is also considering additional support for non-profits and charities, particularly those involved in the front-line response to COVID-19. Further details will be announced in the near term.
      • An eligible employer’s entitlement to this wage subsidy will be based entirely on the salary or wages actually paid to employees. All employers would be expected to at least make best efforts to top up salaries to 100% of the maximum wages covered.
    • There will be strict penalties for those that try and game the system and misuse this subsidy.
    • If you do not qualify for this current wage subsidy, you may still qualify for the previous wage subsidy of 10% of remuneration paid from March 18 to June 20, 2020, up to a maximum subsidy of $1375 per employee and $25,000 employer.
  • HST/ GST Payments:
    • HST/GST payments will be deferred interest free until June
    • The goal is to try and keep money available in businesses
  • Canada Emergency Business Account:
    • The government will be launching a program through the banks to offer up to 40,000 dollars loans guaranteed by government. These will be interest free for the first year and if you qualify, $10,000 of that will be forgivable.   More information to come.

As this pandemic continues to progress, there will be more information provided. If you have any questions or concerns, or are looking for more information, please use the following resources:

www.ontario.ca/coronavirus

www.canada.ca/coronavirus.

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