On January 26, the federal government launched its Highly Affected Sectors Credit Availability Program (HASCAP), which provides up to $1 million in low-interest loans to single businesses and up to $6.5 million for hotel chains and other hard-hit larger businesses with multiple locations.
“We are launching the [HASCAP] to help those businesses hit hardest by the pandemic with low-interest, government-backed loans,” said Mary Ng, Minister of Small Business, Export Promotion and International Trade, in making the announcement Tuesday.
Through HASCAP, the Business Development Bank of Canada will work with participating Canadian financial institutions to offer the government-guaranteed, low-interest loans, Ng explained. HASCAP is meant to help businesses with their day-to-day operating costs during the COVID-19 crisis and enable them to invest in their longer-term prosperity, according to a government statement.
HASCAP is available to businesses in all sectors that have been hit especially hard by the pandemic. This includes restaurants, businesses in the tourism and hospitality sectors, and those that rely on in-person service.
To be eligible for HASCAP, businesses need to show a year-over-year revenue decline of at least 50 per cent in three month, within the eight months prior to their application.
This should not pose an obstacle for most, based on reports from the hospitality industry.
Earlier this month, BC Hotel Association president and CEO Ingrid Jarrett said her $3.2 billion industry has been ravaged, with occupancy of less than 30 per cent at the end of 2020.
“That is a 60 per cent drop from 2019,” she said. “We have 46 per cent of properties reporting that if they don’t receive access to government-supported financing, they will not stay in business.”
“About 82 per cent of all [hotel] properties in B.C. are small and medium-sized, independently owned and operated businesses,” Jarrett noted. “They are barely hanging on.”
The Fairmont Hotel Vancouver and other large hotels enjoyed new business in mid-2020 from British Columbians. But general manager Adam Laker said that business dried up when the government instituted travel restrictions on November 7. He estimated that current occupancy is “in the 10 per cent to 20 per cent range.”
Ian Tostenson, CEO of the British Columbia Restaurant and Foodservices Association, estimated that about 20 per cent of the province’s restaurants have closed as a result of the pandemic and could rise to more than 30 per cent by the time restrictions ease.
Glowbal Group restaurant owner Emad Yacoub pinned his losses on New Year’s Eve – when the province restricted service for the evening – at around $100,000.
“My restaurant at the Pan Pacific Hotel, the Five Sails, is at about 5 per cent capacity,” Yacoub said.
Applicants must be able to show their financial institutions that they have previously applied for either the Canada Emergency Wage Subsidy or the Canada Emergency Rent Subsidy. Eligible businesses can start applying February 1 at principal financial institutions and more widely by February 15. Interested businesses should contact their primary lender to get more information and to apply, according to Ng’s office.
More information is available at www.bdc.ca/hascap.
- With files from Business in Vancouver