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9 ways to increase cash flow during coronavirus

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

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

1 - 3 of 3
Name Product APR Range Loan Amount Loan Term Minimum Revenue Minimum Time in Business Loans Offered Broker Compliance
Journey Capital Business Loan
8.00% – 29.00%
$5,000 - $300,000
6 - 18 months
6+ months
Term Loan, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months with a minimum annual gross revenue of $100,000.

Journey Capital offers fast and simple financing. Apply in less than 10 minutes with your basic business information and see your loan offers without hurting your credit score. Get approved within 1 business day, and choose your term, amount and payback schedule once approved.
Merchant Growth Business Loan
12.99% - 39.99%
$5,000 - $800,000
6 - 24 months
$10,000 /month
6 months
Unsecured Term, Line of Credit, Merchant Cash Advance
To be eligible, you must have been in business for at least 6 months and have a minimum of $10,000 in monthly sales.

Merchant Growth offers financing tailored to business needs. It specializes in providing capital based on future cash flows, but it also offers fixed solutions. Fill out an application within 5 minutes and get your funds within 24 hours.
Loans Canada Business Loan
6.60% - 29.00%
$4,000 - $500,000
3 - 60 months
over $10,000/month
100 days
Unsecured Term
Loans Canada is a loan search platform with access to multiple lenders. Applicants will be matched with a suitable lender based on credit history and borrowing requirements.
To be eligible, you must have been in business for at least 100 days, have a Canadian business bank account and show a minimum of $10,000 in monthly deposits ($120,000/year).

Loans Canada connects Canadian small business owners to lenders offering financing up to $500,000. Complete one simple online application and get matched with your loan options.

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

1 - 8 of 8
Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income call to action Welcome Offer
American Express Aeroplan Business Reserve Card
American Express Business Edge Card
BMO World Elite Business Mastercard
$0 annual fee for the first year ($149 thereafter)
BMO Air Miles No-Fee Business Mastercard
BMO AIR MILES World Elite Business Mastercard
$0 annual fee for the first year ($149 thereafter)
Business Platinum Card from American Express
20.99% - 28.99%
Marriott Bonvoy Business American Express Card
American Express Business Gold Rewards Card
20.99% - 28.99%

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.

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.

The BCAP consists of 5 individual components:

The Business Credit Availability Program (BCAP)

Large Employer Emergency Financing Facility

Large Canadian businesses that (1) have a significant impact on the economy, (2) make at least $300 million 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.

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

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 Rent Subsidy (CERS)

Note: In October, 2020, the Canada Emergency Rent Subsidy (CERS) was introduced to replace the Canada Emergency Commercial Rent Assistance (CECRA) program. New applications for CECRA stopped being accepted as of September 30, 2020.

The Canada Emergency Rent Subsidy program provides rent subsidies of up to $75,000 per business location and up to $300,000 per business group (including any affiliate entities). Eligible businesses include for-profits, non-profits and charities. There is no minimum revenue drop required to qualify.

The actual amount businesses will receive is a base rate percentage that will vary depending on how much revenues have dropped. Businesses located in areas affected by public health restrictions may also qualify for an additional 25% through Lockdown Support. You can apply through your CRA My Business Account or through the Government’s “Represent a Client” service. Visit the Government of Canada website for more details.

Canada Emergency Wage Subsidy (for small & large businesses, nonprofits & charities)

Until June, 2021, eligible businesses as well as nonprofits and charities can apply to receive a wage subsidy for specific 4-week “claim periods.” The number of employees businesses have is irrelevant — this subsidy is to help both large and small businesses. Funding does not automatically renew. Business owners must reapply for each claim period after the period is over.

The Prime Minister also encourages subsidized businesses to use funds to hire back employees that have been laid off due to the pandemic.

For claim periods 1-4 (March-June, 2020)

Employees of subsidized businesses can expect to have 75% of their incomes covered up to a maximum of $58,700 (up to $847/week). 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.

For claim periods 5 and onwards (July, 2020 – present)

For claim periods 5 and onwards (July, 2020 – present), employees of subsidized businesses can expect to receive a base rate percentage that varies depending on how much revenues have dropped. If your business has lost more than 50% of revenues, an additional top-up rate will also apply. The maximum rate a business can receive as of claim periods 8-10 (October–December, 2020) is 65%. Check the Government of Canada website to get the latest information for the current claim period.

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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