HASCAP Frequently Asked Questions
We have compiled a list of common questions about the HASCP program and have tried to answer them to the best of our abilities.
While here, you may also want to check your eligibility for a P2P loan program via Lending Loop designed specifically for Canadian Small Businesses to see if you can get a loan from $1k to $500k.
What is the HASCAP Loan Program?
The HASCAP Loan Program is a Canadian Government loan guarantee that provides Canadian businesses in highly-affected sectors with access to low-interest loans of $25,000 to $1,000,000.
The loan itself is issued by primary financial institutions in Canada (i.e., the Big 6 banks). HASCAP Loans are to be made available to Canadian businesses that operate in hard hit sectors, including hospitality, tourism, restaurants, and those that often rely on in-person services.
When is the HASCAP Loan Program Available?
The HASCAP Loan program was announced in the Fall Economic Update delivered on November 30, 2020 with additional details updated on January 28, 2021.
Eligible Canadian businesses can start applying for a HASCAP Loan on February 1, 2021 via the Big 6 Banks. Additional institutions may provide HASCAP Loans after the 15th of February, 2021.
What are the eligibility requirements for a HASCAP Loan?
Your primary financial institution will determine whether you qualify for this program, based on the eligibility criteria established by the Government of Canada. This includes:
- Your business is Canadian based.
- Your business must have been financially stable and viable prior to the current economic situation.
- You must have received payments either from the Canada Emergency Wage Subsidy (CEWS) or the Canada Emergency Rent Subsidy (CERS) by having demonstrated a minimum 50% revenue decline for at least three months (not necessarily consecutive) within the eight-month period prior to the date of the HASCAP Guarantee application. If your business does not qualify for CEWS and CERS, but otherwise meets all HASCAP eligibility criteria, you must provide financial statements that reflect three months (not necessarily consecutive) in which monthly year-over-year revenue decreased by at least 50% within the eight-month period prior to the date of the HASCAP Guarantee application.
- The loan will be used to continue or resume operations.
- The loan cannot be used to pay or refinance existing loans
- You can apply for a loan under the HASCAP Guarantee for each legal entity you own, up to a maximum combined amount of $6.25 million (all legal entities combined).
- Other conditions may also apply.
What does HASCAP mean?
HASCAP is an acronym. HASCAP is short for Highly Affected Sectors Credit Availability Program.
Can I pay off debt with a HASCAP Loan?
No, you cannot use your HASCAP loan to pay off existing debt or refinance existing obligations. HASCAP Loans should be used to continue or resume operations.
Can I still receive a HASCAP Loan if I did not qualify for CEWS or CERS?
Yes. While the process appears to be easier if you had already qualified or received CEWS (Canada Emergency Wage Subsidy) or CERS (Canada Emergency Rent Subsidy), you may still be eligible for a HASCAP Loan.
If your business does not qualify for CEWS and CERS, but otherwise meets all HASCAP eligibility criteria, you must provide financial statements that reflect three months (not necessarily consecutive) in which monthly year-over-year revenue decreased by at least 50% within the eight-month period prior to the date of the HASCAP Guarantee application.
What Businesses Are Deemed to be ‘Highly Affected’?
HASCAP Loans are targeted to those businesses that have been highly-affected by COVID-19. The government has identified several sectors—like tourism, hospitality, arts and culture. However, all research done by this website cannot unearth businesses that would not be eligible as long as you can meet the eligibility requirements. Contact your financial institution for more details.
What is the goal of the HASCAP Loan program?
The goal of the HASCAP Loan program is to support highly-affected Canadian businesses who may have been ineligible for other government programs or otherwise more affected than other businesses. The goal of HASCAP is to provide new support so Canadian businesses can weather this [COVID-19] storm and be ready for a robust recovery that will create jobs and strengthen the middle class.
How much can I apply for under a HASCAP Loan?
HASCAP Loans are for CAD$25,000 to $1,000,000 and the amount eligible will depend on operational costs for the business.
The money is being loaned by the institution itself under a 100% guarantee from the Canadian government provides. The loans are being offered with with flexible and competitive terms.
For those with multiple locations under one entity, up to $6.26 million is available.
What other government funding programs, in addition to HASCAP Loans, are available to me?
While the HASCAP Loan Program (Highly Affected Sector Credit Availability Program) provides loan guarantees of 100% to allow Canadian banks to provide up to $1m in funding to specific business segments, there are a number of other programs available to Canadian Businesses. These include
- The Canada Emergency Wage Subsidy (CEWS) is helping businesses by covering up to 75% of payroll. It has been extended until June 2021.
- The expanded Canada Emergency Business Account (CEBA) provides an interest-free loan of up to $60,000 with 25% forgivable if repaid by December 31, 2022.
- The Canada Emergency Rent Subsidy (CERS), available directly to business owners, covers up to 65% of rent. It has been extended until June 2021. Businesses will receive the new lockdown support of an additional 25% where a shutdown is required by a public health order. This means they can have up to 90% of their rent covered.
- The Regional Relief and Recovery Fund (RRRF) has more than $2 billion to support small businesses across Canada that have been unable to access existing relief measures. It is delivered through Canada’s regional development agencies.
Does a HASCAP Loan need to be repaid?
Yes, HASCAP Loans need to be repaid. The program provides loan guarantees to financial institutions and not grants. The program has promised eligible companies could receive up to a 12-month postponement on principal repayments at the start of the loan.
Repayment terms for eligible companies could be up to 10 years, giving businesses substantial time to recover and rebuild the Canadian economy.
Is HASCAP.ca a government website?
No. This website was started by a Canadian entrepreneur who himself was operating in a highly-affected sector hard hit by COVID-19. Because there was limited information available about HASCAP loans and the government’s HASCAP program, this website was created to collect and circulate information as it was known.