View RCC’s HASCAP Overview for current and up-to-date information on the HASCAP program.
The federal government today introduced the details of the Highly Affected Sectors Credit Availability Program (HASCAP). The program is loans-based, aimed at providing additional liquidity. Despite the name of the program, there are no sectoral limitations, so what it really means is that your business is highly affected by the pandemic.
There is no enterprise size limitation, but the loans range between $25,000 and $1 million. Related but separately incorporated parties can borrow up to $6.25 million, though each would have to meet the revenue decline criteria. 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. HASCAP loans are meant as additional liquidity so they cannot be used to pay off the principal of existing financing, though it appears that they can be used to make regularly scheduled payments.
Qualifying 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. Eligible businesses must have qualified for CEWS (or alternatively, CERS) based on that 3 months x >50% revenue decline, or must first apply to CERS or CEWS before applying for a HASCAP loan.
Application is made through your existing financial institution but you can choose to approach another bank or credit union if your own financial institution is not participating. HASCAP loans are 100% guaranteed by the Business Development Bank of Canada (BDC), which should remove any element of subjectivity in your FI’s assessment of your eligibility. Some FIs may be ready to receive applications as early as February 1, 2021 and it is expected that all FIs will be ready to participate by February 15.
There are several metrics on how much any particular business can borrow based on past fiscal performance, viability, etc. Further details can be found on the BDC website.