{"id":2767,"date":"2020-04-21T09:00:04","date_gmt":"2020-04-21T13:00:04","guid":{"rendered":"http:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/?p=2767"},"modified":"2020-09-17T14:33:26","modified_gmt":"2020-09-17T18:33:26","slug":"bcap","status":"publish","type":"post","link":"https:\/\/stage.tbkdev.com\/dev\/davismartindale.com\/src\/bcap\/","title":{"rendered":"COVID-19 Business Credit Availability Program (BCAP) \u2013 helping businesses obtain financing"},"content":{"rendered":"

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The Government of Canada, through the Business Development Bank of Canada and Export Development Canada, and in partnership with the various financial institutions, has introduced the Business Credit Availability Program (BCAP). The purpose of BCAP is to help businesses obtain financing during the current period of uncertainty and hardship due to COVID-19.<\/p>\n

An overview of the various BCAP programs can be found on the Government of Canada website:\u00a0 https:\/\/www.canada.ca\/en\/department-finance\/programs\/financial-sector-policy\/business-credit-availability-program.html<\/a><\/p>\n

Businesses are directed to contact their current financial institution for program information and in order to apply. With the exception of the $40,000 Canada Emergency Business Account (CEBA), BCAP program applications will generally require businesses to provide the lender some or all of the following information:<\/p>\n

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  1. Your most recent accountant prepared financial statements, and your most recent internally prepared financial statements.<\/li>\n
  2. A recent list of your accounts receivable and accounts payable.<\/li>\n
  3. A forecast or projection model. At a minimum, this should be your expected cash flows over the next 6 to12 months, along with a business plan.<\/li>\n<\/ol>\n

    Most businesses can readily provide the items in the first two categories.<\/p>\n

    The items in the third category, a cash flow forecast and business plan, may be less familiar to some business owners.<\/p>\n

    Cash Flow Forecast<\/h4>\n

    The cash flow forecast is important for lenders as it shows the business\u2019 expected shortfall in funding \u2013 by month \u2013 for the next 6 to 12 months as a result of Covid-19. In addition to quantifying your funding needs, it demonstrates to your lender that you have put significant thought and effort into developing a strategy to cope with, and manage, the lack of revenue and other short term impacts of Covid-19.<\/p>\n

    The cash flow projection will be expected to show the monthly impact on two main parts of the business:<\/p>\n

    Cash receipts<\/em><\/strong><\/p>\n

    You will need to map out, by month, the cash you anticipate receiving from sales and the collection of receivables.\u00a0 What adjustments need to be made due to lost or deferred sales, or customers\u2019 financial hardship? For example, what is the impact of a partial or complete suspension of your operations, the interrupted operations of your suppliers or customers, or a general decline in customer demand? Will these sales be recaptured in the future?<\/p>\n

    Cash expenditures<\/em><\/strong><\/p>\n

    These should also be reported on a monthly basis, and can be further broken down between non-discretionary and discretionary:<\/p>\n