What is HASCAP?
The Highly Affected Sectors Credit Availability Program aims to provide additional cash flow for businesses struggling with the pandemic.
HASCAP provides loans ranging from $25,000 to $1 million. These loans are for a term of up to 10 years at 4% per annum and principal payments can be postponed for the first 12 months. Because the loans are meant to provide additional liquidity, they cannot be used to pay off the principal of existing financing, but they can be used to make regularly scheduled payments.
In order to qualify, businesses need to show three distinct months of more than 50% year-over-year revenue decline over the course of the eight months preceding the application, though those three months do not need to be consecutive. You must have also already received payments from the Canada Emergency Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS) or if your business does not qualify for CEWS and CERS, but otherwise meets all HASCAP eligibility criteria, you can provide financial statements that show three months in which monthly year-over-year revenue decreased by at least 50% within the eight-month period prior to the date of the HASCAP Guarantee application.
Related but separately incorporated entities can borrow up to $6.25 million combined, though each entity would have to meet the revenue decline criteria.
How to apply
Applications are made through your existing primary financial institution. If your primary financial institution is not participating in the program, you can choose to apply through another bank or credit union. It is expected that all financial institutions will be ready to participate by February 15.
The application deadline is June 20, 2021.
- HASCAP Information from Business Development Bank of Canada (BDC)
- HASCAP overview presentation provided by BDC for RCC members
The HASCAP Guarantee is a federal government support program to help the businesses hardest-hit by Covid-19. This program is available to all eligible retailers, regardless of sector.
Retailers can apply through their primary financial institutions for a HASCAP loan of $25,000 – $1M to cover their operational expenses. The government (BDC) will provide a 100% net loss guarantee to make it easier for these retailers to secure a loan.
To qualify, a retailer must, among other criteria:
- be a commercial enterprise whose intent is to generate revenue from the sale of goods or services that is at least sufficient to cover its operating expenses and service its debt
- have been financially stable and viable prior to the current economic environment
- not have an impaired loan (as determined in accordance with International Financial Reporting Standards) as at March 1, 2020, or the eligible loan closing date
Retailers must also demonstrate significant revenue decline and, if eligible, apply for the Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS).
Generally, HASCAP Guarantee applicants must provide proof of at least three months of monthly year-over-year revenue decrease of a minimum of 50% per month, within the 8-month period prior to the date of the HASCAP Guarantee application
This program, despite its name, has sector-agnostic application criteria. In other words, the sector you are in is irrelevant to the loan application.
Criteria are mainly financial and include your ability to demonstrate the pandemic’s significant negative financial impact on your business.
Generally, you need to apply and be eligible for the CERS and CEWS in order to access the HASCAP Guarantee. You can have the CEWS and CERS already and still apply for the HASCAP Guarantee.
If you are not eligible for the CEWS or CERS, you can still apply for the HASCAP Guarantee. It is best to apply to all three through your primary financial services provider.
If your business has received the Canada Emergency Wage Subsidy (CEWS) or the Canadian Emergency Rent Subsidy (CERS):
You must provide Canada Revenue Agency attestation forms demonstrating a minimum 50% revenue decline, for at least 3 months, within the 8 month period prior to the date of your HASCAP Guarantee applications. Your financial institution will require this information to process your request.
If your business did not receive CEWS or CERS and is eligible for them: You must apply for CEWS or CERS. Your financial institution will require this information to process your request.
If your business does not qualify for CEWS or CERS: You must provide financial statements that reflect at least three months (which do not need to be consecutive) of monthly year-over-year revenue decrease of a minimum of 50% per month, within the 8-month period prior to the date of the HASCAP Guarantee application. Your financial institution will require this information to process your request.
- Loan amount between $25,000 and $1M per legal entity
- Maximum combined eligibility of $6.25 million for related legal entities
- Up to 10-year repayment term
- 4% fixed interest rate
- Up to 12-month postponement of principal repayments at the start of the loan
- No personal guarantee will be taken to secure the loan