FedDev Ontario is one of Canada’s 6 Regional Development Agencies (RDA) charged with administering the Regional Relief and Recovery Fund (RRRF) covering the southern Ontario region (for clarity, that includes Ottawa). RRRF provides interest free loans to help support fixed operating costs of SMEs affected by COVID-19.
The loans range from $40k – $500k depending on your 2019 revenues. There is a scale but it works out to approximately 5% of your 2019 Revenues. So for those with revenues of $1M you can get up to $50k. For $2M you can get up to $100k. There is an exception if you were pre-revenue with investor support you can still qualify for up to $250k. These are interest free loans with no payments until January 2023.
The FedDev website states that the program is for SMEs that do not qualify for, or have been declined for current Government of Canada COVID-19 measures. But the application states you ‘may not’ be eligible but does not mean you are ‘are not’ eligible. The door is ajar should the circumstances be that you have exhausted those other funds and still need to cover some fixed monthly costs (other than salary).
Furthermore you must have applied for all Government programs for which you are eligible including: CEBA, BCAP, and BDC COVID-19 Working Capital Loan before you are eligible to apply for this loan. Also if you received CEWS or IAP then salary costs covered in those programs would not be considered eligible costs for this program (no double dipping).
Here are some anticipated FAQs to help you understand if this applies to you:
In layman’s terms – whom is this program targeted at?
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These financial contributions are for SMEs who have exhausted all other existing Federal Government COVID-19 programs and still need additional cash to stay afloat.
If I am receiving CEWS or IAP does that disqualify me for this program?
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Not necessarily. It will disqualify you for claiming funding to cover salaries and benefits (since those costs are already covered), but if you still have insufficient funds to cover other fixed operating costs you may qualify to cover those other costs.
Which programs did I need to apply for first?
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CEBA – (Canada Emergency Business Account). This is the $40k interest free loan that required Box 14 on your T4 Summary to be between $20k and $1.5M.
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BCAP – (Business Credit Availability Program). This is the co-lending program between BDC and EDC that integrates with your financial institution. To date I have not seen many applications for this loan, but given this eligibility requirement I expect I’ll see much more activity here.
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BDC Working Capital Loans. These were the first COVID-19 loans to hit the market at favourable low interest rates.
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*CECRA – the Canadian Emergency Commercial Rent Assistance program for small business (details on how to apply still pending at this time). You can skip this as long as you do not request coverage of rent from RRRF.
What costs are eligible for this program?
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Capital lease payments for existing equipment and machinery, property taxes, utilities, bank / interest fees, professional fees, insurance payments
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Rent* is eligible only if you have first approached your landlord about the CECRA
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Salaries and benefits are eligible only if you are not already receiving benefits from CEWS or IAP.
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Not eligible are mortgage payments, refinancing costs, new capital expenditures, and acquisition of land and buildings
Are some businesses being prioritized over others?
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Possibly, yes. In the event that interest exceeds supply they will be prioritizing Manufacturing, Technology and Tourism sectors first.
Anything else to note?
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Yes, there is a $40k option for those who did not qualify for CEBA. I expect the way it is detailed that it may be easier to qualify for this portion even if you did qualify for CEWS. So if you did not qualify for CEBA, and you have been denied from all the other programs (including CECRA), then I think the odds are decent for applying for this program to cover your non-salary existing fixed costs.
How do I apply?
Once you have exhausted all the options referenced above, you can apply at this link.
