RBC HASCAP Loans
RBC (Royal Bank of Canada) has been named as one of the first six Canadian banks to provide low-interest, long-term loans under the 100% guaranteed government program affecting Highly Affected Sectors. This includes hospitality firms, restaurants, arts, culture, and other Canadian businesses impacted by COVID.
While their website still claims that “additional information is coming soon” with regards to RBC’s participation and issuance of HASCAP loans, if you dig a little further into their website, you can find information for their clients.
More details from RBC
RBC provides us with a good glimpse into different eligibility tiers by the amount being borrowed. Like all institutions, there is a pathway to borrow up to $1.0 million CAD, though max. loan amounts dependent on business size. Your HASCAP loan must be used to cover operating expenses such as rent and payroll, and working capital needs such as inventory. The loan will be funded by RBC.
Loan Eligibility Requirements
Up to $100,000
- RBC requires confirmation of receipt of at least 3 months of CERS/CEWS benefits, OR If not eligible for CERS/CEWS, accountant prepared financial statements that show 50%revenue decline for at least 3 months
$100,001 to $250,000
- RBC requires confirmation of receipt of at least 3 months of CERS/CEWS benefits, OR If not eligible for CERS/CEWS, accountant prepared financial statements that show 50% revenue decline for at least 3 months
- Confirmation that annual revenues are at least $500,000 as per accountant prepared financials statements completed prior to March 1 2020.
$250,001 to $1,000,000
- RBC requires confirmation of receipt of at least 3 months of CERS/CEWS benefits OR If not eligible for CERS/CEWS, accountant prepared financial statements that show 50% revenue decline for at least 3 months
- DSC Ratio of 1.1:1 tested on all existing debt and new HASCAP debt.
NOTE: For those small businesses who don’t speak ‘banker’, the BDC defines ‘DSC Ratio’ as, “the debt service coverage ratio, which shows how much cash a company generates for every dollar of principal and interest owed. It is calculated by dividing a company’s EBITDA (earnings before interest, taxes, depreciation and amortization) by all outstanding debt payments of interest and principal.
Next Steps to Qualification
- RBC is encouraging its business clients to speak with their RBC Account Manager to learn more. If you do not have a dedicated Account Manager, they invite you to call their Advice Centre at 1-866-591-0757.
