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COVID-19 FINANCIAL ASSISTANCE GUIDE
Dennis Serre - April 7 , 2020
The Covid-19 crisis affects all of us in many unfortunate ways. Due to this unprecedented event and the concerns it has raised, all businesses must take drastic actions in order to keep all their employees and clients safe. Serre Financial has the Covid-19 Financial Assistance Guide for business owners. To help you, we have assembled selected resources to consult in assessing how to respond to this crisis. We are here to help guide you through these steps if you have any questions.
Assistance for Businesses:
Cash Flow
We strongly recommend taking advantage of assistance for which you qualify to sustain yourself while the economy re-balances. Your business’ cash flow is your life blood.
The Canada Emergency Wage Subsidy – 75%
https://www.canada.ca/en/department-finance/news/2020/04/the-canada-emergency-wage-subsidy.html
What is available?
A retroactive subsidy in the amount of (the greater of):
· 75% of the remuneration, up to a maximum benefit of $847/employee per week; or
· The amount of remuneration paid, up to a maximum benefit of $847 per week or 75% of employees’ pre-crisis weekly remuneration, whichever is less
on wages paid for any 12 weeks starting after March 15, 2020.
Who qualifies?
Businesses who have seen at least a 30% decline in revenues compared to the same period last year. (*detailed periods of eligibility are specified)
Non-arm’s length employees must have been paid within the March 15 - June 6 timeframe in order to qualify for the subsidy.
How to apply?
Applications are made through the CRA's My Account Portal.
Temporary Wage Subsidy – 10%
What is available?
A retroactive subsidy in the amount of 10% of remuneration paid employees between March 18, 2020 and June 19, 2020, to a maximum of:
· $1,375/employee
· $25,000/business
Who qualifies?
To qualify, three criteria must be met.
o Firstly, eligible employers are individuals, non-for-profit organizations, charities, Canadian Controlled Private Corporations, and partnerships whose members are in one of the proceeding categories;
o Secondly, they must have had a payroll account as of March 18, 2020 and pay remuneration to an employee based in Canada;
o And finally, for those who do not qualify for the Canada Emergency Wage Subsidy (75%)
Additionally, Non-arm’s length employees must have been paid within the March 15 -June 6 timeframe in order to qualify for the subsidy.
How to apply?
There is no application. Qualified employers may immediately begin reducing their payroll remittances for payroll periods which end between March 18, 2020 and June 19, 2020, by the appropriate amounts for each employee, until the maximum thresholds are reached.
Interest-Free Bank Loans
Major banks are offering several options for clients with short term cash flow issues.
What is available?
An interest free loan of up to $40,000. 25% of the loan can be forgiven. The remainder must be repaid by December 31, 2022.
Who is eligible?
Businesses in existence by March 1, 2020 with payrolls of over $50,000.
How to apply?
This program is being delivered by the banks, via online applications. Contact your banker for direction to their online application or contact Serre Financial for guidance.
BDC- COVID-19 (relief financing)
What is available?
Loan amount; Up to $2,000,000; Repayment: 12 months interest only followed by 60 months amortization schedule; Security: Personal guarantee & General Security Agreement and/or potential real estate charge.
Who is eligible?
Exclusions: BDC’s regular eligibility criteria still applies (ie. Cannot support pubs/bars/clubs, marijuana companies, non-Canadian companies, start-ups, refinancing or other debt, change of ownership financing).
How to apply?
Contact BDC directly: https://www.bdc.ca/en/pages/special-support.aspx
Deferring Tax Payments
· Any income tax amount or balances which came due to the CRA after March 15, 2020 are deferred until after August 31, 2020. This applies to tax balances due, as well as installments.
· Any HST tax amounts which came due to the CRA after March 15, 2020 are deferred until June 30, 2020
· For the next four weeks, the CRA won’t contact any SME businesses to initiate post assessments GST/HST or income tax audits.
· Municipal Property Tax Payments
o Businesses on three-installment payment plans, property tax installment due extended to May 1, 2020 (from April 1, 2020). May 1, 2020 installment due date extended to June 1, 2020.
o Businesses on 11-installment pre-authorized payment plans, each installment due date extended by 30 days.
o Late penalties would be waived for 30 days, starting March 16, 2020.
o Note: as interim 2020 bills have already been mailed that specify the regular installment due dates, the City will use other means (website, social media, other advertising), to identify this grace period to business owners. Property tax accounts will be adjusted as necessary to reflect these relief measures.
General Pandemic Preparedness for Business
· This useful guide (Pandemic Preparedness Guide) was developed by the Canadian Chamber of Commerce. It includes tools, templates, best practices to consider as well as advises businesses on:
o Business continuity and crisis plans
o Planning for the impact on your business
o Planning for the impact on your people
Serre Financial continue to be here to assist anyone who needs additional information or clarity about the Covid-19 FINANCIAL ASSISTANCE. Serre Financial has implemented its business continuation plan over the last few weeks. Although Serre Financial is considered an essential service, we will continue to operate at full capacity, albeit remotely. Thanks to technology, our employees will be working remotely from the safety of their homes.
