Commercial Rent Relief for Small Business
Today April 4th, 2020, the government announced that it has reached an agreement with provinces and territories to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75 %for small businesses that have been affected by COVID-19.
Qualifying businesses are those paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70% drop in pre-COVID-19 revenues. Non-profit and charitable organizations can also qualify.
- The program will provide forgivable loans to qualifying commercial property owners to cover 50% of 3 monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June.
- Under a rent forgiveness agreement, which includes a moratorium on eviction, the commercial property owner would reduce the small business tenant’s monthly rent by at least 75%. The tenant would be responsible for covering 25%, the property owner 25%, while the federal government and provinces would share the remaining 50%. The forgivable loans would be disbursed directly to the mortgage lender.
- It is expected that CECRA will be operational by mid-May, with commercial property owners lowering the rents of their small business tenant’s payable for the months of April and May, retroactively, and for June.
- More details will be provided in the coming days.
- It is not yet known how or if this program will apply for commercial property with no mortgage or lender
Your HS & Partners Team