Support for BC Businesses Facing Losses Due to COVID-19

by | Commercial Insurance, Uncategorized

Support for BC Business

The past couple of months have been extremely challenging for many businesses – both small and large. And while there is cautious reopening in some sectors, many business owners are still deeply concerned about how they will make ends meet in the weeks and months to come.  We hope this summary of assistance options will be helpful as some businesses begin to reopen their doors.

5 Options for Businesses Striving to Stay Financially Afloat During the COVID-19 Crisis

1. Enhanced Access to Credit

Export Development Canada (EDC) has put in place two programs to assist small and medium size businesses during the COVID-19 crisis:

The Canada Emergency Business Account (CEBA) is open to small businesses and not-for-profit organizations. Through this program, businesses can access loans of up to $40,000 to cover non-deferrable costs such as payroll, rent, insurance and utilities. The loans will be interest-free, and applicants who pay back the loan by December 31, 2022 can have up to 25% of their loan forgiven, up to $10,000.

The Business Credit Availability Program (BCAP) guarantee is a joint effort between EDC and financial institutions. Through this program, EDC will guarantee 80% of new operating credit and cashflow term loans that financial institutions extend to small and medium-sized enterprises, up to $6.25 million.

Access to these programs is through your financial institution.

2. Payroll Assistance

The Government of Canada has created the Canada Emergency Wage Subsidy (CEWS) to protect jobs and better position employers to resume operations. The subsidy generally covers 75% of an employee’s wages – up to $847 per week – for employers of all sizes who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May. The program will subsidize employee wages for up to 12 weeks, retroactive from March 15, 2020, to June 6, 2020. Now extended until at least the end of August 2020!

You can apply for this program through the Government of Canada.

3. Assistance with Rental Payments

The Canada Emergency Commercial Rent Assistance (CECRA) is designed to lower rent by 75% for small businesses that have been affected by COVID-19.

The program will provide forgivable loans to qualifying commercial property owners to cover 50% of three monthly rent payments that are payable by small business tenants who are experiencing financial hardship during April, May, and June. Specifically, small businesses that have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID revenues.

The loans will be forgiven if the mortgaged property owner agrees to reduce the small business tenants’ rent by at least 75% under a rent forgiveness agreement. The small business tenant would cover the remainder, up to 25% of the rent.

Learn more about the CECRA.

4. Tax Deferrals

The Government of Canada is allowing all businesses to defer income tax payments until August 31, 2020, for amounts that become owing on or after March 18 and before September 2020. This relief would apply to tax balances due, as well as instalments. No interest or penalties will accumulate on these amounts during this period.

They are also allowing businesses to defer GST/HST payments and customs duties until June 30, 2020. Any GST/HST payment that becomes owing from March 27 until the end of May can be deferred until June 30, 2020. For GST and customs duty payments for imported goods, deferral will include amounts owing for March, April and May.

5. Utility and Insurance Payment Deferrals/Assistance

Through BC Hydro’s COVID-19 Customer Assistance Program and Relief Fund, commercial customers may choose to defer bill payments or arrange flexible payment plans with no penalty. Businesses that needed to close due to COVID-19 may also be eligible to have their electricity use charges waived for up to three months. Large industrial companies can defer 50% of their payments for the next three months. Call BC Hydro at 1-800-224-9376 to discuss your options.

FortisBC’s Customer Recovery Fund supports small businesses impacted by COVID-19 with bill deferrals, interest free repayment schedules and bill credits. If you’re a small business owner in the program, you may be able to receive support in the form of bill credits to help offset the charges on your account while you’re unable to operate your business. You may also be able to defer your bill payments from April 1 to June 30, 2020 via a repayment plan that will be spread out over the next 12 months to help lessen the immediate financial impacts of the COVID-19 crisis. Learn more about the Customer Recovery Fund.

ICBC customers on a monthly Autoplan payment plan, including commercial fleet owners, who are facing financial challenges due to COVID-19, can defer their payments for up to 90 days with no penalty. Apply online or call 1-800-665-6442.

At a time like this, you may also have questions about your business insurance coverage. If so, please contact Park Insurance today, we are happy to answer your questions.

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