On February 5, 2021, the HASCAP loan website was updated to provide the following details:
General
Loans will carry a 4% interest rate.
A list of participating financial institutions was released.
Neither BDC nor the financial institutions can grant exceptions.
The loan is to be used to continue or resume operations.
The loan cannot be used to pay or refinance existing debts.
Businesses from any sector can apply.
Eligibility
Applicants must have received payments from the CEWS or CERS program by demonstrating a minimum 50% revenue decline for at least three months within the last 8. If the business does not qualify for CEWS and CERS, eligibility criteria may be met through the submission of financial statements. CEWS or CERS attestation forms demonstrating required revenue decline must be provided.
If the business was eligible for CEWs or CERS but has not received it, the business must apply for (and receive) them first.
The following borrowers are considered ineligible:
businesses whose revenue model is predicated on non-commercial sources such as direct government funding or private donations;
government organizations or bodies (other than an indigenous entity or body) as well as entities in which a government organization or body (other than indigenous entities or bands) owns equity interests;
non-profit organizations, registered charities, unions, or fraternal benefit societies or orders, or a Person in which any such organization owns equity interests [except if it is actively carrying on a business in Canada (including a related business in the case of a registered charity) that earns revenue primarily from the regular supply of property/goods or services and not from non-commercial sources such as direct government grant funding or private donations];
religious organizations, or a Person* in which any such organization owns equity interests;
fundraising vehicles for charities;
a Person in which equity interests are held by any single current member of the Parliament of Canada or any single current member of the Senate of Canada other than a Person* whose equity interests are publicly traded;
entities that operate any form of sexually exploitive business or promote violence, incite hatred or discriminate on the basis of race, national or ethnic origin, colour, religion, sex, age or mental or physical disability;
businesses that have been determined to have committed tax evasion.
Other terms and conditions apply.
* “Person” means any natural person, corporation, company, partnership, joint venture, limited liability company, unincorporated organization, trust or any other entity.
Risk Ratings
Minimum risk ratings will apply, varying by size of new loan.
The pre-financing eligibility validation is based on the criteria established by the Government of Canada:
Segment 1–Eligible loans between $25,000 - $100,000: your business must meet a probability of default requirement.
Segment 2–Eligible loans between $100,001 - $250,000: your business must:
a) meet a probability of default requirement; and,
b) have generated a minimum of $500,000 in gross revenues for the 12-month period ending as at the date of its most recent annual financial statements prior to March 1, 2020.
Segment 3–Eligible loans between $250,001 - $1,000,000: your business must:
a) meet a minimum debt service coverage ratio requirement of 1.10x as at the date of its most recent financial statements prior to March 1, 2020 and including the HASCAP loan and any other debt added since the most recent annual financial statements prior to March 1, 2020; and,
b) have a minimum S&P CCC+ rating prior to March 1, 2020.