“I run a small print shop over in East Vancouver. I’ve had to lay off a few employees. I’m still open, but just barely keeping the lights on. One of my biggest clients owes me a bunch of money, but now says they won’t pay me this month."
– Sydney, Vancouver
I’ve heard there’s government help available for small business owners?
The federal government has put in measures to help businesses. There are interest-free emergency loans available, up to $40,000 (apply through your primary financial institution). Initially, one of the requirements was that a business must have paid out at least $20,000 in 2019 to its employees. On June 26, the government expanded the criteria to include owner-operated small businesses that do not have a payroll, as well as sole proprietors receiving business income directly. Keep this page in mind when reviewing the evolving eligibility criteria.
There are also tax deferrals (more time to pay income tax and sales tax owing). Check out the deadline dates here.
And there’s a 75% wage subsidy for small businesses, for up to 24 weeks, retroactive to March 15. Meaning: the government will pay the business 75% of their workers’ wages (up to certain maximums). The intent is to help businesses to keep workers (or re-hire ones that have been laid off) during the crisis.
I’m a small business owner that has had to close. Can my landlord still make me pay rent?
First, consult your lease, and see if there’s any clause that you can point out that can relieve you of the obligation to pay rent during the pandemic. No matter what, try to keep communication lines open. Your landlord is no doubt aware of the situation. Perhaps you can defer the rent payment, or agree to just pay a part of it for a few months. You can also remind them about the government’s Canada emergency commercial rent assistance program, which provides forgivable loans to landlords who agree to reduce their tenant’s rent. Commercial landlords can apply for this program as of May 25.
If you have insurance, call your broker. It may be that you’re covered for business interruption insurance and can make a claim for compensation at this time.
As well, the Business Development Bank of Canada has financing programs for entrepreneurs impacted by the pandemic. There are interest-free emergency loans available (up to $40,000), and loans to help small- and medium-sized businesses with cash flow.
I’m a small business owner. A client has refused to pay me, using coronavirus as their reason. Can they do this?
This can depend. If you have a written contract with this client, check to see if there is a “force majeure” clause. Often called an “Act of God” clause, it may let people get out of their contractual duties because of an unforseen event beyond their control. But it’s not for certain. It often requires a reasonable level of effort by both parties to mitigate their situation.
This is a tough time for everyone. Best to communicate openly, either orally or in writing, to try to reach a compromise.