What is the Regional Relief and Recovery Fund? What options are available?

We all need a break sometimes, especially during times like these. The Regional Relief and Recovery Fund (“RRRF”) is a federal loan for businesses that were viable as of March 1, 2020 and have since had financial difficulties resulting from COVID-19. RRRF loans are meant for businesses that have already tried applying for other federal funding like the Canada Emergency Business Account (“CEBA”), which is available through financial institutions. If you haven’t already applied to federal funding such as the CEBA, you should do that first.

Do I qualify for any RRRF loans? What are some of the eligibility requirements?

There are four types of funding available under the RRRF for businesses in Western Canada:

1. Funding up to $40,000, for rural businesses

    • This is meant for small- and medium-sized businesses located in non-metropolitan regions in Western Canada (all served by Community Futures organizations).
    • Eligible applicants include sole proprietorships, partnerships, corporations, social enterprises, or other similar organizations.

2 Funding up to $40,000, for women-owned or women-led businesses

    • This is meant for businesses that are at least 51% owned by women. If a business is owned 50-50 by a woman and her husband or common-law spouse, that business also can qualify.
    • Eligible applicants include sole proprietors and “main street” businesses, such as retail shops, restaurants, corner stores etc. and businesses of strategic importance to the community.

3. Funding up to $40,000, for all other small- and medium-sized businesses

    • This is meant for businesses not eligible for the rural businesses or women-owned businesses streams.
    • Eligible applicants include pre-revenue firms (e.g. a company that has not had any sales to date), businesses that do not have salaried employees (e.g. a company with a workforce of contract employees), and businesses with no payroll that do pay their owners a salary (e.g. a company that pays its owners through dividends).
    • Ineligible businesses include sole proprietorships and not-for-profit organizations.

4. Funding over $40,000

    • This is meant for businesses that have less than 500 full-time employees and are in need of more than $40,000 in RRRF loans.
    • Businesses that have received support from other Government of Canada relief funding measures, including the Business Development Bank of Canada’s Co-Lending Program, but require additional funding to mitigate liquidity pressures may still apply.
    • Ineligible businesses include sole proprietorships and not-for-profits.

What are the repayment terms that will apply?

For the loans up to $40,000, if 75% of the loan is repaid by December 31, 2022, the remainder of the loan will be forgiven. Loans over $40,000 must be 100% repaid.

For all four categories listed above, there is no interest accrual or principal payments through December 31, 2022. Blended principal and interest payments begin January 1, 2023 and loans must be repaid by December 31, 2025.

I’m still not sure if I qualify for RRRF loans. Can I contact you to make sure?

Yes! If you’re not sure if you qualify for RRRF loans, contact our talented lawyers at Segev LLP! We’ll look at your specific situation and let you know if you can take advantage of the RRRF to help your business make it through this tough time.

For more information on any of the above, or to connect with one of our lawyers, feel free to contact us at 604-629-5400 or via e-mail at: [email protected]

Disclaimer

***The above blog post is provided for informational purposes only and has not been tailored to your specific circumstances.  This blog post does not constitute legal advice or other professional advice and may not be relied upon as such. ***