Weekly Update – 27 January 2021

Welcome back to our Weekly Update!

PM Warns Canadians to Expect More Travel Restrictions

Prime Minister Justin Trudeau is warning Canadians to expect more travel restrictions in the near future. He reiterated federal public health guidance to avoid all non-essential travel, both abroad and in between provinces.

Currently, the land border between Canada and the U.S. remains closed to travellers, while international travellers flying into the country must show a negative COVID-19 test 72 hours before their departure flight and quarantine for 14 days upon arrival.

HASCAP Loan Applications to Open on February 1

New loans from the Highly Affected Sectors Credit Availability Program (HASCAP) will open for applications on February 1.

Loans will start at between $25,000 and $1 million for a single business depending on the size of the operation, and run up to $6.25 million for companies with multiple locations like a chain of hotels or restaurants. Interest rates will be set at 4% across the board, terms will be up to 10 years, with up to a 12-month postponement of principal payments at the start of the loan.

To be eligible, companies will have to show a year-over-year revenue drop of at least 50% over three months, not necessarily consecutive, in the eight months before the application.

Further details can be found here.

Regional Relief and Recovery Fund

The $1.7 billion Regional Relief and Recovery Fund (RRRF) is providing assistance to businesses and communities that may require additional support to cope with and recover from the pandemic. The RRRF is part of Canada’s COVID-19 Economic Response Plan and is complementary to existing federal programs.

You must first apply for other federal support measures before applying to the RRRF. Applicants are required to attest that they have applied for other federal benefits and were approved, rejected or deemed ineligible.

More information on eligibility criteria and how to apply can be found here. You may also drop us a message if you need assistance on your application.

Ontario Now Accepting Small Business Support Grant Applications

The Ontario government has opened an application process for small businesses affected by the provincially ordered shutdown to access thousands in one-time support grants.

The Small Business Support Grant, which was announced at the end of 2020, will provide between $10,000 and $20,000 to small businesses that were ordered closed or were subject to “significant” restrictions.

To qualify for the program, the government required business owners to show they had a revenue decline of at least 20 per cent in April 2020 compared to April 2019.

You can learn more about it here. Also, you may drop us a message if you need assistance.

Government Expands Canada Emergency Business Account Loans

Starting December, eligible businesses facing financial difficulties due to COVID-19 can access a second CEBA loan of up to $20,000 – on top of the initial $40,000 that was available to small businesses. Half of this additional financing, up to $10,000, will be forgivable if the loan is repaid by December 31, 2022.

Applications for CEBA have been extended to March 31, 2021. More information can be found here. Alternatively, if you have any questions or require assistance, simply drop us a message.

Government Support for Businesses

The federal government continues to enact measures to mitigate the financial impact of the pandemic. Here are the available assistance you can take advantage of:

Wage Subsidies

  • The Canada Emergency Wage Subsidy (CEWS) is intended to help businesses cover a portion of wages and keep employees on payroll. It continues until June 2021.
  • The work-sharing program allows employees whose hours got reduced by an average of 10% to 60% to claim employment insurance for lost wages. This has been extended to 76 weeks from 38.

Rent Relief

  • The Canada Emergency Rent Subsidy provides rent and mortgage assistance until June 2021. Businesses can make claims retroactively for the period of Sept. 27 to Oct. 24, 2020.

Business Loans

  • The Canada Emergency Business Account (CEBA) offers government-guaranteed bank loans of up to $40,000 for small businesses. The deadline for the application has been extended to March 31, 2021.
  • For mid-sized companies, the Business Development Bank of Canada’s mid-market financing program provides commercial loans between $12.5 million and $60 million.

5 Tips to Simplify Your Small Business’ Accounting

If you run a small business, a big-business accounting system may not be the best choice for you. It would be better to simplify your accounting and concentrate on actionable metrics. This is especially true if you are the only one managing your business.

Below are some of the ways you can streamline your small business accounting system:

  • Track your inventory using dedicated inventory management software. Online inventory management software allows you to see your stock levels in real-time, understand your product margins and make better decisions. Choose a system that integrates with your accounting system to save even more admin time.
  • Automate your invoicing. Cloud-based accounting systems now allow you to email invoices from your accounting system and can even connect to tools like Stripe and PayPal so your customers can pay online. If you make it easier to pay you, chances are you’ll get paid faster!
  • Pay your bills when they’re due. Late payment fees can be steep and paying upfront eliminates the need to track your bills in the accounting system.
  • Don’t use your business accounts for personal expenses. Always be diligent about which card you swipe. Your business transactions must be accounted for, so keeping your personal and business affairs separate can save you from hassles in the long run. Plus, your accountant and bookkeeper will thank you!
  • Automate your payroll. Setting up your payroll so it’s automatic, or outsourcing to an experienced team, will save you time and money.

Finally, don’t hesitate to seek help from an advisor to help you stay on top of your finances. We are experts in small business accounting and can provide training for you and your in-house team. Drop us a message today so we can discuss how we can help you.

Get in touch

Contact us if you have any questions or want to discuss the next steps for your business.

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