How taxpayers stand to benefit from federal support for big business amid COVID-19

Erwin Oropesa

Finance Minister Bill Morneau provided details about the federal government’s Large Employer Emergency Financing Facility (LEEFF) on Wednesday. The program, announced last week, gives financial support to big businesses that need help get them through the COVID-19 pandemic.

Companies with annual sales of at least $300 million can apply for the program designed to protect businesses and jobs.

“These terms ensure that this financing facility provides financing to bridge through this difficult time, but not bailouts,” Morneau said during a news conference.

Public companies must issue warrants with the option to purchase the borrower’s common shares totalling 15 per cent of the principal amount, or receive cash consideration equivalent to the value of the warrants.

“The idea behind the warrant is to make sure that if a firm does well, that Canadians and Canadian tax payers share in that upside,” Morneau said.

Morneau also said Ottawa won’t sit on

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For minority-owned businesses shut out of coronavirus loans, an ongoing push for access

Erwin Oropesa

Rahama Wright has been in business for 15 years, but the experienced entrepreneur could never have foreseen the impacts of a pandemic coming her way.

“It has been an up and down rollercoaster,” Wright told ABC News. The owner of Shea Yeleen, a social impact business that sells shea butter products made by women in rural west African villages, Wright says one of the lowest points was being unable to secure a Paycheck Protection Program loan from the government’s coronavirus emergency response.

Wright applied in early April, but by the end of the month, she said she had received no response.

“I was very disillusioned. I felt I would not have an opportunity to access any funding because I had not heard back.” Wright laid off her five employees and began to consider shuttering her store in Washington, D.C.

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One in five small business loan requests delayed or rejected

Erwin Oropesa

Thousands of small businesses face collapse as one in five applications for the emergency coronavirus Bounce Back loan scheme has yet to be approved. 

Almost 120,000 firms which applied for cash from the flagship rescue programme have either had their applications declined or are still waiting to hear if they will receive help – putting them at risk of going under as the lockdown grinds on.

More than a third of applications at HSBC, Britain’s biggest bank, have not been approved. 

A total of 581,516 businesses have applied for Bounce Back loans of up to £50,000 since the scheme launched on May 4, with more than £14bn paid out to 464,393 companies so far.

The emergency funding is handed out by banks but backed by the state, with taxpayers covering all of lenders’ losses if a borrower defaults. The loans are interest free for the first 12 months.

Lenders claim

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