FINANCIAL SUPPORT DUE TO COVID-19

• $40,000 INTEREST FREE TERM LOAN FROM YOUR BANK 

How does this work?

$40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus.

To qualify, these organizations will need to demonstrate they paid between $50,000 to $1 million in total payroll in 2019.

If you pay 75% of the balance of the term loan on or before December 31, 2022, the remaining balance of your term loan will be forgiven.  In other words for example if you repaid 30,000 (75% of $40,000) on or before December 31, 2022, the government will waive the balance of $10,000.

If you do not repay the loan by December 31, 2022, you will need to repay the entire loan balance. – contact your bank.

The term loan is interest free for 1 year but your bank “may” provide the interest free option for a longer period. Also, the loan will most likely become a regular line of credit in most cases and each bank may differentiate on the repayment terms – contact your bank.

How to Apply:

Small businesses and not-for-profits should contact their financial institution to apply.

• WAGE SUBSIDY PROGRAM (10% VS 75%) 

Eligible employers include individuals, taxable corporations, and partnerships as well as non?profit organizations and registered charities.

Canada Emergency Wage Subsidy, full details can be found HERE

The program will be administered by the CRA, will subsidize 75% of the first $58,700 normally earned by employees of qualifying employers, for a 12-week period from March 15 to June 6, 2020.

Example: If your staff earned $80,000 – you will not be receiving 75% of $80,000. It will only be 75% of $58,700 not exceeding $847 per week.

Employers will need to show a drop in gross revenues of at least 30% in March, April, or May year-over-year. Organizations which are not eligible for the 75% may still qualify for the 10% subsidy under the Temporary Wage Subsidy program.

For those who already claimed the 10% subsidy and are also eligible to claim the 75% subsidy, the government has indicated that the 75% subsidy will be reduced by the benefit you have already received. The government is anticipating about 3 – 6 weeks to start rolling out this program.

If you have not already setup your deposit details with CRA on your My Business Account, please do so at your earliest convenience to avoid delays in receiving funds. The application will be completed online or via your My Business Account.

For those of you who just started or recently opened a business, the Finance Minister said they are adapting and updating the policy but you would need to be able to show some drop in revenue. This could be from the previous month, this could be from the previous year if you can obtain records of the business you purchased.

For those organizations with venture capital and are currently pre-revenue, there was no clear answer on whether or not your organization qualify and how to apply for this benefit. Please reach out and we will assist you with navigating this subsidy.

Payback and Penalties

The government has outlined there will be a payback requirement and/or penalties for those that do not qualify for the 75% subsidy but applied and received the benefit. Be sure you qualify before applying.

• $2000 – CANADA EMERGENCY RESPONSE BENEFIT (CERB)

Applications for the CERB, will open on April 6, 2020. This is for the $2,000 per month for individuals and includes wage earners, self-employed and business owners who would not be otherwise eligible for EI. This program runs up to 16 weeks. The applications can be completed through your CRA My Account page or by calling in. HERE

• EI PORTAL FOR EMPLOYEES CURRENTLY ELIGIBLE

Employees who are currently eligible to obtain EI can complete their online application HERE

• FILING AND PAYMENT DEADLINES

CRA has provided updated filing and payment deadlines on their website HERE

Key items are:

Filing deadline for personal tax has been extended to June 1, 2020 with any balances owing (including installments) deferred until September 1, 2020

Filing deadline for corporations has been extended to June 1, 2020 for any corporations that would have had to file between March 18 and June 1, 2020. Any corporate tax balances owing can be deferred until September 1, 2020.

Charities deadline for filing the T3010 has been extended to December 31, 2020 for those originally due on or after March 18, 2020

HST balances otherwise due between March 18 and June 1 have been deferred to June 1, 2020.

• MORTGAGE AND CREDIT PAYMENT DEFERRALS

Subjective to your financial situation. This program is for people who have been affected by Covid19 and can prove financial hardships, and ability to repay. The lender may ask for a statement detailing your hardship and inability to pay on a temporary basis. Every lender is handling this differently – contact your bank.

Payment deferral does not mean your payment is waived. It is only delayed and interest will be added. Majority of lenders will take the interest that would have been paid compounded and add it to your monthly mortgage balance. Upon maturity, the payments will be calculated on the higher balance.

If you have decided on deferring your payment then be prepared to be in further debt and pay back more in the long run. Some lenders are deferring just the minimum payment on credit cards.

If you have no other options or choice then this would be the way to go in order to ease your financial stress at this time.

If you cannot reach anyone by phone, then send a fax and keep the confirmation of fax sent or reach out to your financial advisor or mortgage broker for assistance.

• SOME SHORT TERM BENEFITS OF PAYMENT DEFERRAL

Ease immediate financial burden

Hold cash in hand due to uncertainty of how long this will last

• SOME LONG TERM AFFECTS OF PAYMENT DEFERRAL

Paying more interest

Going further into debt

Not certain how you will manage with higher debt repayment amount later if you are struggling now

May go into default on mortgage payments and loans due to higher monthly carrying cost

Uncertain about job security or return date

Companies have closed down, some have downsized and may take time to recover when back up in operation which will affect your position

You may not be able to consolidate credit card debts or other loans

Real Estate market price may drop which leaves you with limited option to refinance your mortgage

You may not be eligible for EI or other financial assistance later as you may have used up your eligibility amount by then.

CEO, Ameera Ameerullah

CONTACT DETAILS FOR SOME LENDERS

ATB: 1-800-332-8383

B2B Bank:  1-800-263-8349

BMO: 1-877-895-3278

Bridgewater Bank:  1-866-243-4301  [email protected] 

CMLS:  1-888-995-2657, [email protected] 

Connect First:  1-403-736-4000

Desjardins:  1-800-224-7737

Equitable Bank: 1-888-334-3313, [email protected]

First Calgary Financial:  1-403-736-4000

First National:  1-888-488-0794, [email protected] 

Haventree Bank: 1-855.272.0051, [email protected] 

HomeTrust: 1-855-270-3630

HSBC: 1-888-310-4722

ICICI:  1-866-726-0825

Lendwise: 1.=-877-637-4911

Magenta:  1-888-267-1744, [email protected] 

Manulife: 1-877-765-2265

Marathon Mortgages: 1-855-503-6060

MCAP: 1-800-265-2624, [email protected] 

Merix: 1-877-637-4911

Optimum: 1-866-441-3775

RBC: 1-866-809-5800

Right Mortgage:  1-855-892-5401, [email protected] 

RMG: 1-866-809-5800

Scotiabank: 1-800-472-6842, Mortgage Payment Relief Form

Servus: 1-877-378-8728

TD: 1.866.222.3456, Mortgage Payment Deferral Form

RFA 1-866-939-5005 Mortgage numbers starting with 4

RFA 1-877-776-6888 Mortgage numbers starting with 6

RFA 1-833-228-5697 Mortgage numbers starting with 7, 8, 9

Street Capital –  see RFA above

Tangerine 1-888-826-4374

Optimum 1-866-441-3775

PC Financial 1-888-723-8881

Radius Financial 1-866-550-8227

HomeEquity Bank 1-866-331-2447

HSBC 1-888-310-4722

CFF Bank 1-855-767-3031

CIBC 1-800-465-2422