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ESSOR

 

Concerted temporary action program for businesses

 

For businesses whose liquidity is affected by the repercussions of COVID-19

This new emergency funding measure provides ad hoc and exceptional support for businesses affected by the repercussions of COVID-19.

Eligible Businesses

This financial assistance is available to businesses operating in Québec, including cooperatives and other social economy enterprises with commercial activities. Eligible businesses are those that find themselves in a precarious situation and temporary difficulty as a result of COVID-19. They must show that their financial structure offers realistic prospects for profitability. Businesses cannot be under the protection of the Companies’ Creditors Arrangement Act or the Bankruptcy and Insolvency Act. 

Eligible Projects

Businesses must show that their cash flow issues are temporary and that the liquidity shortage stems from:

 

  • A problem involving the supply of raw materials or products (goods or services)
  • An inability, or a substantially decreased ability, to deliver goods, products or services

Applications will be reviewed on a case-by-case basis, according to the business’s circumstances and Investissement Québec’s management practices.

Specific Conditions for Businesses Located in a Red Zone and Ordered to Close

 

Eligible businesses are those located in zones determined by the Minister of Health and Social Services, more specifically in red zones, and thereby ordered to close in order to protect public health.

 

 

Only businesses in the following categories are eligible:

 

  • Arcades, amusement parks, tourist attractions and water parks
  • Bars and discotheques, subject to the exclusions mentioned above
  • Biodome-type museums, planetariums, insectariums, botanical gardens, aquariums and zoos
  • Concert halls
  • Libraries other than those operated by educational institutions, except for document loan desks
  • Movie theatres and performing arts theatres, including performance venues
  • Reception rooms
  • Restaurants
  • Saunas and spas, except for personal care treatments provided on-site
  • Sports training centers
  • Theatres
  • Youth hostels

 

The loan beneficiary can be the establishment’s owner or a tenant occupying a commercial space.

 

The funding granted covers the business’s needs as of October 1, 2020.

 

Tourist Attractions

 

  • A tourist attraction is defined as a place, location or product, developed or built, whether seasonal or year-round, that is able to attract visitors as a result of its distinctive qualities.
  • Applications for financial assistance must cover only activities related to the attraction’s principal activity (for example, the aquatic activities portion of a water park’s operations).
  • The attraction or the business operating the attraction that is the subject of an application for financial assistance must:
    • Be registered on the Bonjour Québec site as an attraction or demonstrate its importance to regional and Québec-wide tourist offerings;
    • Show that the attraction’s activities had been carried on for at least the last three years of operation;
    • Show that the operator draws self-generated revenue and charges admission fees for the activity that is the subject of the application for financial assistance.

 

Exclusion for Complementary Activities

Complementary operating activities, such as accommodations, food services and retail operations, do not qualify for funding.

 

Specific Exclusions for Tourist Attractions

 

  • Camping
  • Food services
  • Festivals and events
  • Casinos and games of chance
  • Theatres and performance venues
  • Industrial tours
  • Corporations, tourism offices, municipalities and associations
  • Municipal, paramunicipal, regional, provincial and federal government bodies

Specific Conditions for the Tourism Industry

 

Only the following tourist establishments and attractions are eligible:

 

Accommodation establishments with 4 to 300 rooms, excluding:

 

  • Youth hostels
  • Bed and breakfasts
  • Tourist homes Resorts
  • Educational establishments
  • Accommodation establishments with 300 or more rooms

 

Tourist Attractions

 

  • A tourist attraction is defined as a place, location or product, developed or built, whether seasonal or year-round, that is able to attract visitors as a result of its distinctive qualities.
  • Applications for financial assistance must cover only activities related to the attraction’s principal activity (for example, the aquatic activities portion of a water park’s operations).
  • The attraction or the business operating the attraction that is the subject of an application for financial assistance must:
    • Be registered on the Bonjour Québec site as an attraction or demonstrate its importance to regional and Québec-wide tourist offerings;
    • Show that the attraction’s activities had been carried on for at least the last three years of operation;
    • Show that the operator draws self-generated revenue and charges admission fees for the activity that is the subject of the application for financial assistance.

 

Exclusion for Complementary Activities

 

  • Complementary operating activities, such as accommodations, food services and retail operations, do not qualify for funding.

 

Specific Exclusions for Tourist Attractions

 

  • Camping
  • Food services
  • Festivals and events
  • Casinos and games of chance
  • Theatres and performance venues
  • Industrial tours
  • Corporations, tourism offices, municipalities and associations
  • Municipal, paramunicipal, regional, provincial and federal government bodies

Eligible Industries

All industries are eligible, except for the following:

 

  • Weapons manufacturing or distribution
  • Games of chance and gambling (video lottery operations), combat sports, racing and other similar activities
  • Any form of sexual exploitation, such as strip bars, escort agencies, brothels, erotic massage parlours and swingers’ clubs
  • Production and sale of tobacco and drugs along with services related to their use, except for projects involving pharmaceutical-grade products approved by Health Canada and having a DIN, or their ingredients, as well as R&D projects licensed by Health Canada
  • Any activity whose main purpose is protected by the Canadian Charter of Rights and Freedoms (religion, politics, human rights advocacy, etc.)
  • Any other activity that may offend public morals.

Details of Financial Assistance

  • A loan guarantee is the preferred form of financing. Financing can also take the form of a loan from Investissement Québec.
  • Investissement Québec aims to work in close cooperation with financial institutions and federal authorities in order to share risks
  • For a line of credit guarantee, the guarantee is only applicable in the following specific conditions:
    • New lines of credit
    • Increases to existing lines of credit. In such case, Investissement Québec only guarantees the portion of the increase, based on the agreed upon collateral rate.
  • The minimum funding amount is $50,000.
  • Refinancing is prohibited.
  • This measure is designed to shore up the business’s working capital.

 

Special conditions may apply.

Specific Conditions for Businesses Located in a Red Zone and Ordered to Close

 

  • Deferral of principal repayment for 12 months, and interest can be capitalized for up to 12 months
  • Amortization: up to 36 months (excluding the principal and interest deferral periods)
  • Loan calculated based on the need for operating capital and covering a maximum of three months (in exceptional circumstances, up to 12 months)
  • Following the moratorium on principal repayment, a sum equal to 100% of eligible building leasing or ownership expenses may be written off, up to a maximum of $15,000 a month, during the period in which establishments in red zones are closed, up to a maximum of 80% of the total of the loan.
  • Expenses eligible for write-off are:
    • School and municipal taxes
    • Rent (the portion not covered by another government program)
    • Mortgage interest paid
    • Charges for public services such as electricity and gas
    • Insurance
    • Telecommunication charges
    • Permit and association fees
  • Businesses will qualify for enhanced assistance for a given month if they were ordered to close by ministerial decree for at least 10 days in that month.

 

The funding granted covers the business’s needs as of October 1, 2020.

 

Other conditions may apply.

 

Specific Conditions for the Tourism Industry

 

  • There is no minimum financial assistance amount.
  • Principal repayment is deferred for up to 24 months, and interest can be capitalized over a period of up to 24 months.
  • Amortization: up to 60 months (excluding the principal and interest deferral periods)
  • Businesses must show that they are able to return to profitability in the medium term.
  • The loan is eligible for partial write-off, as follows: 25% of the total amount (principal and interest) paid off by the end of the 48th month (from the time repayment begins) can be written off, up to a maximum of $100,000 per tourist establishment or attraction.

 

Learn More

Should you have any general questions about the Concerted Temporary Action Program for Businesses (PACTE), contact our call centre at 1-844-474-6367.

 

Our customer service centre will be pleased to provide you with more information about the program.

 

Please note, however, that in the current COVID-19 situation, your financial institution is in the best position to assess the options best suited to your business. You should therefore contact the account manager at your financial institution first. This will be a key step allowing you to identify, with your account manager, the relief measures to which you may be entitled (i.e., deferral of principal payment) for your cash flow plan.

 

However, if your business is located in a red zone and has been ordered to close, please contact our call centre at 1-844 474-6367.

 

For any other specific questions regarding financing that you already have with Investissement Québec, please contact your account manager directly. To find your account manager’s contact information, please refer to our online directory.

 

June 2020

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André Williot

Client Service Officer

1 844 474-6367
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