Regional Relief and Recovery Fund (RRRF) Application

Guidelines: Business Application to KBDC

1.0 RRRF Description

The purpose of the RRRF is to address the COVID-19 impacts on rural and remote communities in Nunavut, contributing to their short-term stability and readiness for economic recovery. Specifically, this funding makes available additional investment capital to the Kivalliq region through KBDC to focus on the following two objectives:

• increasing the capacity of SMEs and Social Enterprises within Nunavut, particularly in remote communities, to mitigate challenges related to COVID-19 through working capital liquidity supports; and

• providing ongoing technical support for the survival of SMEs and Social Enterprises within Nunavut affected by COVID-19.

Priority will be given to businesses who are unable to access other federal relief measures available under Canada’s COVID-19 Economic Response Plan or unable to obtain a loan/credit from traditional financial institutions, and are struggling with working capital needs or technical aid as a result of COVID-19.

2.0 Definitions

The following definitions apply to the interpretation of RRRF terms:

Applicant refers to any SME or Social Enterprise that applies for or receives a Loan from a CF.

Loan means any loan made by a KBDC to an applicant SME or Social Enterprise that is funded under the RRRF and that complies with the terms and conditions as set out in the approved loan agreement.

RRRF means the Regional Relief and Recovery Fund established by the Government of Canada in response to the COVID-19 pandemic.

SME means any small and medium-sized enterprise, which are defined as having less than 500 employees and annual sales revenue of less than $20 million, and produce goods and  services for the market economy, regardless of their business structure (e.g. sole proprietorships, for profit or non-profit corporations, cooperatives, etc.).

Social Enterprise means any business producing goods and services for the market economy, but that manages their operations and redirect their surpluses in pursuit of social, environmental and community goals. Typically, Social Enterprises grow out of community economic development strategies involving citizens, governments, the voluntary sector, business learning institutions and other partners.

3.0 Parameters of the Loans

KBDC is authorized under RRRF to issue Loans to each eligible SME or Social Enterprise up to a maximum of $100,000. This funding is intended to be complementary to other loan programs already announced under Canada’s COVID-19 Economic Response Plan, and the combined total assistance received by a given SME or Social Enterprise under this Program, the Canada Emergency Business Account, and the Indigenous Services Canada loan program delivered through Aboriginal Financial Institutions may not exceed $100,000.

KBDC applies the following repayment terms to all RRRF Loans approved and issued to applicants:

• the combined amount of this Loan, and any other loan entered into by the recipient that is currently on offer as part of Canada’s COVID-19 Economic Response Plan must not exceed $100,000.

• the Loan will have an interest-free period and deferral of principal payments until December 31, 2022;

• the Loan may be fully or partially repaid at any time by the Borrower to the KBDC, without penalty, except any interest payable as specified below;

• the Loan will include a repayment incentive, whereby if the Borrower repays 75% of the principal amount of the Loan by December 31, 2022, the balance equal to 25% of the Loan, to a maximum of twenty five thousand dollars ($25,000), will be credited against the outstanding balance of the Loan;

• in light of the exceptional circumstances surrounding COVID-19, interest at a maximum rate of Five Per Cent (5%) may be charged, and may only start to accrue on the remaining principal of the Loan commencing January 1, 2023.

• the full balance must be repaid no later than December 31, 2025.

4.0 KBDC_RRRF Loan – Applicant Eligibility

To be eligible for a Loan, an SME or Social Enterprise must have been registered and operating in Nunavut on and prior to March 1, 2020.

The Applicant must have attempted to access other federal relief measures under Canada’s COVID-19 Economic Response Plan, such as the Canada Emergency Business Account (CEBA), the Wage Subsidy benefits, the Commercial Rent Assistance for small businesses among others, and must show the CF that it was either determined to be ineligible or rejected.

If the Applicant is eligible for the National Aboriginal Capital Corporations Association (NACCA) COVID-19 loan program, offered through KBDC or other Aboriginal Financial Institutions, the Applicant must first demonstrate to the CF an unsuccessful attempt to access that program.

The Applicant must demonstrate to the KBDC, through an attestation, that they have not or will not apply or accept other Government of Canada equivalent support, except for the wage subsidy programs such as the Canada Emergency Wage Subsidy (CEWS).

The Applicant must not receive a Loan for the same costs for which it has received or will receive other federal relief measures. The Applicant must demonstrate need to KBDC, who may consider an attestation from the Applicant that the Loan proceeds will be used for costs and/or working capital related to COVID- 19 or other  emergency purposes as deemed appropriate by KBDC.

5. Eligible Costs

The following costs are eligible for a Loan made by a KBDC that is funded under the RRRF:

• costs that will help to stabilize the Applicant to mitigate impacts of COVID-19 and that are not covered by other government COVID-19 relief measures;
• costs that have become due or have been incurred since March 15, 2020; and
• non-deferrable operating expenses including , without limitation, payroll ,rent, utilities, insurance, property taxes and regularly scheduled debt service,
• emergency measures such as health and safety improvements, workplace sanitizing, and procedures to secure the safety of employees and prepare for business opening; and
• costs that are not otherwise ineligible as set out below.

6. Ineligible Costs

In calculating the amount of the Loan, KBDC will only consider the costs for which the Applicant has not received any other government relief or assistance. For example, if the Applicant has received a 75% subsidy under CEWS, the Loan cannot be used to cover the remaining 25%. The following costs will be deemed ineligible for a Loan funded under the RRRF:

• costs related to refinancing of an existing debt;
• costs related to land acquisition;
• goodwill;
• costs related to the purchase of any assets for more than the fair market value of that asset;
• costs of amortization; and
• Funds may not be used to fund any payments or expenses such as prepayment /refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.

7. Supporting Information Required

Please attach the following to your Emergency Business Loan application:

1. A completed Application for the Emergency Business Loan (download it here)
2. A detailed cashflow projection for the period March 15 2020 to March 31, 2021;
3. Copies of new or existing service contracts, if any; optional (KBDC to determine whether this is a requirement)
4. Clear copies of your Identification: Driver's License and confirmation of Indigenous heritage (i.e. Certificate of Indian Status).

Please email fully completed application with attachments to: dgibbons@kbdc.ca or you can use the form down bellow for submission.

If you have any questions about the loan requirements, please email your questions and phone number to: dgibbons@kbdc.ca