9 ways to increase cash flow during coronavirus

Fast, low-cost funding to keep your business up and running during the COVID-19 pandemic.

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We’ll continue updating this page with resources and information as new details emerge on how Canadian leaders and businesses are responding to COVID-19.

Small businesses likely need to consider both short- and long-term solutions to cover operating expenses during the coronavirus outbreak. The government has started offering low- and no-interest financing to small businesses affected by COVID-19. But you might also need to apply for more traditional financing to tide you over as you wait for your government applications to be processed.

Business line of credit

A business line of credit gives you access to a credit limit that runs anywhere from $5,000 to $5 million in some cases — though it varies widely by lender. Rates can start at around 5% and go as high as 20%+ in some cases, depending on your business’s financials and your credit score. This often includes an origination fee up to 1-4%, a monthly or annual service fee and a fee each time you withdraw funds.

Once you’re approved for a credit line, you can quickly access cash as needed — usually no later than the next business day. This makes it ideal if you expect to need funding, but aren’t sure how much or how long that need will last. It can be less expensive than a credit card in some cases. And it can cover a wider range of expenses, like rent and utilities.

Business lines of credit

Online business loans

Online business loans can get cash in your bank account as soon as the same day, depending on the lender. These tend to run from $1,000 to $500,000 with rates from 6% to 30% APR depending on the lender, your credit score and business financials.

Unlike banks and credit unions, online lenders process your application using an algorithm. This cuts down the time it takes to receive a decision from days to a matter of seconds. The downside is many come with high rates compared to other loans. And some can come with weekly or even daily repayments, which can be difficult to swing if your revenue is low and expected to drop more.

Business loans

Find an online business loan today

Name Product Interest Rate Min. Loan Amount Max. Loan Amount Loan Term Minimum Revenue Min. Credit Score Filter Values
SharpShooter Funding Business Loan
Fee based, Prime pricing starting at 9.00%
$1,000
$300,000
6 months - 5 years
$4,166 /month
500
SharpShooter Funding offers loans up to $300,000 for small business owners who have been business for at least 100 days and can show a minimum of $4,166 in monthly deposits ($50,000/year).
OnDeck Business Loan
8.00% – 29.00%
$5,000
$300,000
6 - 18 months
$10,000 /month
600
OnDeck offers loans up to $300,000 for small business owners working in approved industries who have been in business for at least 6 months with a minimum monthly revenue of $10,000.
Loans Canada Business Loan
Prime Pricing from 9.00%, Long term financing from Prime + 2.00%
$2,000
$350,000
3 months - 5 years
$4,166 /month
410
Loans Canada connects Canadian small business owners to lenders offering up to $350,000. Borrowers must have been in business for at least 100 days, have a credit score of 410+ and show a minimum of $4,166 in monthly deposits ($50,000/year).
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Business credit cards

Many business credit cards come with signup bonuses of rewards points, extra cash back or a special interest rate on balance transfers — if you can qualify. A low promotional balance transfer interest rate gives you access to affordable financing, as long as you’re able to pay off the balance before the regular rate interest rate kicks in.

If you don’t think you’ll be able to pay off the balance before that date is up, a loan or line of credit might be less costly, since they tend to have lower rates. You’ll also generally need good credit and a strong history of business financials to qualify.

Business credit cards

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Welcome Offer
American Express Business Edge Card
19.99%
21.99%
$99
N/A
Earn up to 42,000 Membership Rewards points in your first year. Earn a Welcome Bonus of 30,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases
BMO Rewards Business Mastercard
14.99%
22.99%
$0 annual fee for the first year ($120 thereafter)
N/A
Get up to $470 in value in your first year. Get 50,000 BMO Rewards points when you spend $5,000 in the first three months. Plus, the primary cardholder will get the first year $120 annual fee waived.
BMO Air Miles Business Mastercard
19.99%
22.99%
$120
N/A
Get up to 3,000 AIR MILES Bonus Miles ($310 towards your purchases with AIR MILES Cash).
BMO Cashback Business Mastercard
19.99%
22.99%
$0
N/A
Get 10% cash back on gas, office supplies, cell phone bills and internet bills for 3 months.
BMO Air Miles No-Fee Business Mastercard
19.99%
22.99%
$0
N/A
Get 1,150 AIR MILES Bonus Miles ($120 towards your purchases with AIR MILES Cash).
American Express AIR MILES for Business Card
N/A
N/A
$180
N/A
Earn a Welcome Bonus of 2,000 AIR MILES when you spend at least $5,000 on eligible purchases within the first three months
Business Platinum Card from American Express
N/A
N/A
$499
N/A
Earn a Welcome Bonus of 50,000 Membership Rewards points when you charge $7,000 in purchases to your Card in your first three months of Cardmembership.
Marriott Bonvoy Business American Express Card
19.99%
21.99%
$150
N/A
Receive 50,000 Marriott Bonvoy™ points when you charge $1,500 in the first 3 months of card membership. Terms apply
American Express Business Gold Rewards Card
N/A
N/A
$250
N/A
Earn a Welcome Bonus of 30,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months
American Express AIR MILES Gold Business Card
19.99%
21.99%
$0
N/A
Earn a Welcome Bonus of 150 AIR MILES when you spend at least $1,000 in eligible purchases within the first three months
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Business insurance claims

If you already have a business insurance policy, reach out to your provider to find out what’s covered during a pandemic. If you’re already covered, you could receive a claim to help cover operating costs. The size of your claim depends on factors like your location, the size of your business, what industry you’re in and the insurance company you’re working with.

Don’t already have insurance? Starting a new policy now won’t help much — you won’t be covered for events that happened before you had insurance.

Invoice factoring

Invoice factoring involves selling unpaid invoices from other businesses or government contracts at a discount to a factoring company. Typically, you receive up to 85% of your unpaid invoice balance up front, and then the rest minus a fee as the invoices are filled. Generally, it’s more expensive than a term loan or credit line.

When exploring your options, try to find a lender that offers nonrecourse factoring. This means the factoring company takes the loss if your invoices aren’t filled. With recourse factoring, your business is responsible for paying back the funds if your customer doesn’t fill their invoice in time — which is highly possible during the coronavirus outbreak. Nonrecourse factoring tends to come with higher fees, however.

Invoice factoring might be costly, but it could be easier to qualify for. Your eligibility doesn’t depend on your business’s credit or revenue — it depends on your clients and their invoices. It also doesn’t involve debt repayments, which can hamper your business as it tries to recover from a loss in revenue. But it can take anywhere from days to weeks or even months, depending on the factoring company and how long it takes clients to pay.

Invoice factoring

What about invoice financing?

Invoice financing allows you to take out a loan using your business’s invoices as collateral. You pay off the loan plus interest and fees, ideally as your clients start filling invoices.

This is usually less expensive than factoring. But if your repayments mainly depend on clients filling their invoices on time, this option could set you up for default in a time when businesses are struggling to stay on top of their bills.

Invoice financing

Government financing

The federal governments has committed billions of dollars to offering a greater number of loans to businesses impacted by the coronavirus outbreak.

Business Credit Availability Program (BCAP)

The government will provide the BDC and EDC with funds to partner with private financial institutions and cooperatively provide loans to small and medium-sized businesses that have been impacted by COVID-19. The BCAP has 5 individual components:

To qualify for financing, businesses have to have been financially viable prior to the coronavirus outbreak and must be directly or indirectly hurt by it now. Business owners should contact their financial institutions, which will oversee the application and approval process for available loan programs, administer loans and supervise repayment.

Large Employer Emergency Financing Facility

Large Canadian businesses that (1) have a significant impact on the economy, (2) make at least $300 in annual revenue, (3) need at least $60 million in financing and (4) are not in the financial sector can get term loans of $60 million or more from the government to cover cashflow needs for the next 12 months. To qualify, businesses must have significant operations in Canada and support a significant workforce in Canada.

Funds are meant to address needs arising as a result of COVID-19, not previously existing insolvencies or restructurings. No maximum loan amount is specified on the government’s website. Applications became available May 20 – visit the Canada Development Investment Corporation (CDIV) website for more details.

Find out more about BDC small business loans and learn about other options for financial support in our guide to business loans during the COVID-19 outbreak.

Negotiate with suppliers and creditors

Some banks and credit card companies are waiving fees, deferring payments and offering other financial assistance to help businesses cope with the financial fallout of the coronavirus outbreak. But many of these are available on a case-by-case basis, so you’ll need to call to learn what your options are.

Suppliers might also be willing to negotiate new payment terms to make sure they don’t lose your business. But get in touch as soon as you can. Skipping payments without communication can hurt your relationship with your supplier — and hurt its ability to operate.

Cut back on expenses

Go over your business’s balance sheet to see where you can cut back. Especially if you’re paying for something that you no longer need if your employees are working from home — like office utilities and overhead costs. After you qualify for financing or see an uptick in revenue, you can start adding back programs if they make your business operations run more smoothly.

Business grants

Innovation Canada has a website has a large database of programs and services – including grants – available to businesses from private and public sources. Use the search tool to find opportunities that could suit your business. Resources include:

  • Loans
  • Capital investments
  • Grants
  • Tax credits
  • Internship subsidies
  • Wage subsidies
  • Partnerships and collaboration opportunities
  • Advice and expertise
Grants and other non-repayable funding to help your business during the coronavirus outbreak

Government subsidies

The federal government has also created some powerful subsidies to help businesses weather the economic fallout of COVID-19. These include the Canada Emergency Commercial Rent Assistance plan and the Canada Emergency Wage Subsidy.

Canada Emergency Commercial Rent Assistance

Businesses – including nonprofits and charities – can get a 75% rent decrease during April, May and June (2020) under the Canada Emergency Commercial Rent Assistance plan. The cost of this plan is being split 50/50 between the government and property owners and is available in every province and territory. To be eligible, your business must be paying $50,000 per month or less on rent and you must have temporarily closed or have had revenues decrease by at least 70% compared to your pre-coronavirus earnings. To learn more, visit the Government of Canada website.

Canada Emergency Wage Subsidy

As of April 27, 2020, eligible small and large businesses as well as nonprofits and charities can apply to receive a 75% wage subsidy until the end of August, retroactively applied from March 15, 2020. This means that employees of subsidized businesses can expect to have 75% of their incomes covered up to a maximum of $58,700 (up to $847/week).

The following information regarding eligibility has been provided:

  • Business revenues must have decreased by at least 30% as a result of coronavirus. Business owners can use sales figures from January and February (2020) to demonstrate their losses. Additionally, they only need to show a 15% drop in revenue during March, given that most businesses didn’t feel the effects of COVID-19 until half-way through the month.
  • The number of employees businesses have is irrelevant. This subsidy is to help both large and small businesses.

Businesses are expected to utilize this benefit on a good-faith basis. If business owners have the funds to cover employees’ incomes, they should provide this. The Prime Minister also encourages subsidized businesses to use funds to hire back employees that have been laid off over the past few weeks due to coronavirus.

Besides helping to prevent layoffs and work reductions, this aggressive financial measure will also spare employers from having to withhold and remit income tax on their employees’ wages.

5 tips to manage your cash flow

These strategies can help you make sure you’re getting the most out of your sales.

  1. Discount early payments. Provide an incentive for your clients to pay ahead of time by offering a discount. You won’t bring in as much, but it could avoid the need for costly financing.
  2. Sell equipment you aren’t using. Instead of letting old equipment sit around, turn it into a profit — or trade it in if you can to secure financing.
  3. Ask for a deposit on orders. To avoid that gap between receiving an order request and payment, ask for customers to provide a deposit of at least 50% on large orders. This can help cover production costs and avoid the need for financing.
  4. Negotiate costs and terms. When possible, give a counter offer when ordering supplies or renegotiate the terms of payment to better fit your business’s monthly cash flow.
  5. Offer subscriptions. A subscription can translate into more consistent revenue than one-off sales.

Bottom line

There’s a chance you’ll need to combine multiple types of financing to cover your operating costs during the COVID-19 outbreak, since low-cost options tend to take a while to come through. But communicating with your creditors and suppliers right away is key — they might be able to adjust your repayments so you don’t have to borrow as much.

Read our guide to loans for businesses affected by coronavirus for more details on your options.

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