Toronto, January 26, 2021 - The Canadian Federation of Independent Business (CFIB) welcomes today’s announcement of the upcoming launch of the Highly Affected Sectors Credit Availability Program (HASCAP), while urging the federal government to forgive a portion of each loan.
Under the new program, businesses experiencing a reduction in revenue of 50 per cent or more for at least three months will be able to apply for a guaranteed loan of $25,000 to $1 million through their financial institution. The program opens at major financial institutions on February 1st.
Many of the design principles of the new program are solid and many firms will welcome an infusion of cash as they enter month 11 of the pandemic. It’s also good news that the program is available to sole proprietors and can be used by business owners who pay themselves in dividends. But most small firms are just not able to manage more debt at this time and will need a percentage of the loan forgiven for the program to be helpful. CFIB recommends the federal government borrow from the model of the Canada Emergency Business Account and forgives a percentage of each HASCAP loan.
CFIB’s latest data finds that one in six businesses is currently considering permanent closure after months of restrictions and low revenues. Canada could lose as many as a quarter of its small businesses by the time the pandemic ends.
The government must work to open the application process at all financial institutions as soon as possible and get the loans flowing out quickly after that to ensure businesses can cover any urgent and outstanding costs.
The program also leaves out new businesses that started in 2020. CFIB has pointed out that none of the federal support measures are currently available to new firms and has asked the government to create pathways for them to access HASCAP and all other government support programs.
CFIB thanks the government for its continued willingness to listen and respond to the needs of small businesses. With the right changes, the federal COVID-19 support programs can help prevent thousands of business closures in the coming months, ensuring a faster economic recovery once the crisis is over.
- Dan Kelly, President, Canadian Federation of Independent Business (CFIB)
For media inquiries or interviews, please contact:
Milena Stanoeva, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small- and medium-sized businesses with 110,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.