Companies that want in on a new federal loan program will have to show sharp revenue declines during the pandemic and that they have already applied for other business aid.
The new loans, from the Highly Affected Sectors Credit Availability Program (HASCAP), will open for applications on Monday and is on top of existing loan programs targeting small businesses.
Loans will start at between $25,000 and $1 million for a single business depending on the size of the operation, and run up to $6.25 million for companies with multiple locations like a chain of hotels or restaurants.
Details made public Tuesday say rates will be set at four per cent across the board, terms will be up to 10 years, with up to a 12-month postponement of principal payments at the start of the loan.
But to get the money, companies will have show a year-over-year revenue drop of 50 per cent or more over three months, not necessarily consecutive, in the eight months before filing an application.
Companies will also have to show that they at least applied for either the federal wage or rent subsidies.
The federally backed loan can be used for rent, utilities and help with payroll, among other costs, to keep operations running through public health restrictions, but can’t be used to pay or refinance existing loans.