April 12, 2020
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BDC Capital, the investment arm of the Business Development Bank of Canada (“BDC”), has announced that it is launching the BDC Capital Bridge Financing Program. The goal of the program is to support small businesses that have been impacted by COVID-19 that may not qualify for the existing relief measures implemented by the federal government.
Under the bridge financing program, BDC Capital may match a current financing round raised through qualified investors into eligible Canadian start-ups by way of a convertible note. Any investment made by BDC Capital will be subject to a due diligence review, agreement on the investment terms and approval by a BDC investment committee.
To be eligible for this program, a company must:
· be Canadian-based;
· be backed by a qualified venture capital firm;
· have raised at least $500,000 in external capital before applying; and
· be specifically impacted by COVID-19.
Eligibility is not limited to companies within BDC’s portfolio. All companies that meet the above eligibility criteria are able to apply.
In the current economic environment, this program presents an intriguing option for venture-backed start-ups with near-term liquidity needs.
Author: Christine Macdonald