May 12 – The federal government announced additional support to mid-size and large businesses. The support is bridge financing and loan guarantees, rather than bailout funds, including:
[1] expanding the Business Credit Availability Program to mid-sized companies with significant financing needs, including loans of up to $60-million per eligible company, and guarantees of up to $80-million; and
[2] establishing a Large Employer Emergency Financing Facility (“LEEFF“) to provide bridge financing to eligible large employers whose needs are not being met through conventional financing mechanisms.
The LEEFF program will be open to large for-profit businesses (with the exception of financial sector businesses) as well as certain not-for-profit businesses (e.g., airports) whose annual revenues are generally $300-million or more. While many LEEFF details remain unknown, the government stated that the following “guiding principles” will apply:
- protection of taxpayers and workers:
- fairness; and
- timeliness.
Businesses must be seeking financing of about $60-million or more and have significant operations or workforce in Canada in order to qualify for LEEFF.
Businesses involved in active insolvency proceedings are ineligible.
