SMALL BUSINESS RELIEF PROGRAM: CANADA EMERGENCY COMMERCIAL RENT ASSISTANCE

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The Ira Smith Team is absolutely operational and both Ira, as well as Brandon Smith, are right here for a telephone appointment, conference calls and also virtual meetings.

Stay healthy and safe everybody.

Introduction

I want to describe what is known right now about the most recent Canadian small business relief program. The program named the Canada Emergency Commercial Rent Assistance (CERC) Program was set up to help small companies cover their commercial rent payments for April, May and June. This kind of program is necessary because of the COVID-19/coronavirus pandemic.

The latest small business relief program announcement

On Friday, April 24, Prime Minister Justin Trudeau announced the launch of the CERC for small companies that have been strongly impacted by the coronavirus pandemic. It is designed to reduce rental costs by 75 percent for impacted local businesses.

The CERC will provide forgivable loans to commercial landlords that qualify under the plan to cover half of the three regular monthly rent payments. It is designed to help small businesses experiencing financial difficulty throughout April, May and June.

The expense and management of the CERC will be shared by the provincial and federal governments. It should be accessible by mid-May.

“A big business starts small.”
-Richard Branson

The Ontario program

Since I practise in the province of Ontario, that is the provincial program I will comment on. Other than for the level of money contributed, presumably, the federal program works the same way in all provinces. When all the details come out, we will then know for sure.

The Ontario Government is devoting $241 million to partner with the federal government to supply more than $900 million in immediate aid. This small business relief program is for both small businesses and their landlords via a brand-new program, the Ontario-Canada Emergency Commercial Rent Assistance Program (OCECRA).

The OCECRA will offer forgivable loans to qualified commercial property owners experiencing potential rental income deficiencies since their local business lessees have been greatly affected by the COVID-19 crisis.

The program has been created to share the cost of small businesses with property owners. Local business occupants, as well as landlords, will each be asked to pay 25 percent of the previous rent cost, before profit. The provincial and federal governments will share the remaining 50 percent.

For example, say the monthly rent payment under a commercial lease for a local business is $10,000. In this instance, presume the property owner doesn’t make a profit (How this will be determined/monitored/enforced right now is anyone’s guess). The landlord gives up $2,500 (25% of rent). The small company would be accountable for paying $2,500 (25% of the rent). The government would cover $5,000. The federal/provincial split will be $3,750 from the federal government (37.5%) and $1,250 (12.5%) from the provincial government.

To obtain the funding, commercial property owners will need to reduce the rental expenses of small company tenants for April through June 2020 by a minimum of 75%. The funding is also contingent on the finalizing of an agreement or letter for rent reduction between the impacted tenant and the landlord. In addition to confirming the rent abatement for the 3 month period, it would also include a halt on distraint or termination for three months.

“You don’t build a business, you build people, then people build the business.”
-Zig Ziglar

How to apply for OCECRA

The OCECRA will be administered by the Canada Mortgage and Housing Corporation (CMHC). Applications can be filed up until September 30, 2020. Support would be retroactive to April 1, covering April, May and June 2020.

“Bringing great people onto your team is about demonstrating that size really doesn’t matter – people do.”
-Jess Campbell

Are there any restrictions on the CERC/OCECRA?

The OCECRA small business relief program would apply to commercial properties with small business occupants. Commercial with a residential component, and mixed-use residential and commercial properties with at least 30% of the space being commercial, qualify as it relates to the commercial rental only.

The property owner must be both the registered owner landlord of the property. If a property owner does not have a mortgage registered against the commercial rental building, the owner has to contact CMHC. Then there will be a discussion if the property owner/landlord has any other type of debt that would allow it to qualify under the program.

What are the qualification demands for small businesses?

“Make something people want” includes making a company that people want to work for.”
-Sahil Lavingia

Are there any qualifications the small business commercial tenant must meet?

A qualified small company lessee is one that:

• Pays a regular monthly rental not more than $50,000 in gross lease payments; and
• is a non-essential local business that has had to shut down or that is experiencing a 70% drop in pre-COVID-19 earnings (identified by comparing earnings in April, May or June to the very same month in 2019.

Not-for-profit organizations and charitable entities would also be taken into consideration for the program.

“A small business is an amazing way to serve and leave an impact on the world you live in.”
-Nicole Snow

Are any kind of small businesses omitted from the CERC/OCECRA program?

The following excludes any business from this small business relief program:

• businesses owned by people holding political office;
• companies that promote physical violence, incite hatred or discriminate; and
• a company placed in their lender’s special accounts group prior to March 1, 2020.

The impact this small business relief program will have depends of course on all the fine print that has not yet come out. For it to be successful, landlords have to agree to the program. A commercial tenant cannot apply on its own.

“Good business leaders create a vision, articulate the vision, passionately own the vision, and relentlessly drive it to completion.”
-Jack Welch

Summary

The Ira Smith Team family hopes that you and your family members are remaining secure, healthy and well-balanced. Our hearts go out to every person that has been affected either via misfortune or inconvenience.

We all must help each other to stop the spread of the coronavirus. Social distancing and self-quarantining are sacrifices that are not optional. Families are literally separated from each other. We look forward to the time when life can return to something near to typical and we can all be together once again.

Ira Smith Trustee & Receiver Inc. has constantly used clean, safe and secure ways in our professional firm and we continue to do so.

Revenue and cash flow shortages are critical issues facing entrepreneurs and their companies and businesses.

If anyone needs our assistance, or you just need some answers for questions that are bothering you, feel confident that Ira or Brandon can still assist you. Telephone consultations and/or virtual conferences are readily available for anyone feeling the need to discuss their personal or company situation.

Are you now worried just how you or your business are going to survive? Those concerns are obviously on your mind. This pandemic situation has made everyone scared.

The Ira Smith Team understands these concerns. More significantly, we know the requirements of the business owner or the individual that has way too much financial debt. You are trying to manage these difficult financial problems and you are understandably anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

“Find a great mentor, someone who has already been through the many challenges of being an entrepreneur..”
-Jodi Levine

The Ira Smith Team is absolutely operational and both Ira, as well as Brandon Smith, are right here for a telephone appointment, conference calls and also virtual meetings.

Stay healthy and safe everybody.