Canada offers loans to auto parts makers

The Business Development Bank of Canada (BDC) has introduced a new temporary Purchase Order Financing initiative designed to assist auto parts manufacturers that have shut down to resume production.

According to a BDC news release, the initiative – part of Canada’s Economic Action Plan’s Business Credit Availability Program (BCAP) – is intended to provide creditworthy businesses with the short-term working capital needed to sustain production until the economy and market conditions stabilize.

“With the help of the BCAP, Canadian small and medium-sized business owners in the auto parts industry will experience improved access to credit,” the Honourable Tony Clement, Minister of Industry, said in the statement. “Small businesses represent 98 per cent of business establishments in Canada. Our economic recovery will be driven in large part by their success.”

To be eligible for the financing, BDC said, a business must be commercially viable and Canadian, be involved mainly in auto parts manufacturing with at least 40 per cent of its sales in auto parts, and have a proven record as a supplier for at least one year.

“As the automobile industry shows signs of recovery, we must make sure that Canadian parts manufacturers have access to the financing they need to resume production,” said Peter Lawler, senior vice president, operations, for BDC in Ontario. “This initiative provides much-needed working capital, enabling manufacturers to accept more orders and thereby sustain and grow their businesses.”

Montreal-based BDC specializes creating and developing Canadian businesses through financing, venture capital and consulting services, with a focus on small and medium-sized enterprises.

For more about the Purchase Order Financing initiative, click on this link.