Coronavirus (COVID-19): Tourism Sector Financing Assistance Program
The Tourism Sector Financing Assistance Program is a loan guarantee that helps tourism operators access lower-cost financing. Eligible tourism operators receive a Standby Letter of Credit that lets them negotiate better terms with their lenders. Operators can submit an Expression of Interest by 22 October 2020.
On this page
Tourism operators have experienced significant declines in revenues due to COVID-19 and are facing financial pressures that make it hard to sustain their operations. Also, because of Public Health requirements, tourism operators with large workforces and significant working capital requirements have faced additional uncertainty which may require them to refinance existing debt or apply for additional debt.
How the program works
Eligible tourism operators can receive a Standby Letter of Credit, which lets them get more favorable business terms with their lenders so they can access or preserve the money they need to stay in business.
The program doesn’t provide direct funding (like loans or grants).
To be eligible to apply for the program, tourism operators must:
- be registered to do business in Nova Scotia and be an active business as defined in the Income Tax Act
- have generated at least 75% of its revenue from Nova Scotia operations during its most recent fiscal year from at least one of these activities:
- resort operations
- tour operations
- scenic and sightseeing transportation
- have employed at least 100 full-time or seasonal employees in its most recently completed fiscal year
- have experienced a revenue decline of at least 50% for the period 1 April 2020 to 31 July 2020 as compared to 1 April 2019 to 31 July 2019
- generate significant economic activity within Nova Scotia (pre-COVID-19 annual revenues of approximately $10 million) during its last fiscal year ending before 1 April 2020
- have already, or be able to negotiate, an eligible debt instrument with a Canadian chartered bank or the Business Development Bank of Canada
Eligible debt instruments
An eligible debt instrument can be an operating line of credit or term loans issued by an eligible financial institution (like a Canadian chartered bank or the Business Development Bank of Canada). Loans can be pre-existing or issued in conjunction with assistance under the Tourism Sector Financial Assistance Program.
Eligible debt instruments must:
- not exceed $15 million
- have an interest rate that doesn’t exceed the Canadian Prime Lending Rate plus 1.5%
- be issued before 1 April 2021 and expire no later than 60 months (5 years) from the date of issuance
The maximum assistance (additional security) sought through this program can’t exceed 95% of the principal amount of the debt instrument.
Debt secured under this program can’t be used for:
- acquiring capital assets
- repaying shareholder loans or related party debt
- paying shareholders of the tourism operator or any related companies
How to apply
- Complete the Expression of Interest form (PDF 170 kb) and email it to the Nova Scotia Covid Response Council by 22 October 2020 at 5 pm.
- Eligible tourism operators who submit the form will receive additional information about the application and review process.
Nova Scotia Covid Response Council
Email : email@example.com