Applications for the Government of Canada’s Large Employer Emergency Financing Facility (LEEFF) program have opened as of Wednesday.

Minister of Finance Bill Morneau said that applications can be made as of Wednesday morning, through a subsidiary of the Canada Development Investment Corporation (CDEV). CDEV has formed a new subsidiary, Canada Enterprise Emergency Funding Corporation (CEEFC), to administer LEEFF.

The financing will be available to companies with significant operations in Canada and annual revenues of more than $300 million.

LEEFF, which was announced last week, is set to provide bridge financing to Canada’s largest employers that have been affected by COVID-19. Loans will be provided by CEEFC in cooperation with Innovation, Science and Economic Development Canada (ISED) and the Department of Finance.

The bridge financing will be available to companies with significant operations in Canada, annual revenues of more than $300 million, and requiring a minimum loan size of $60 million. Morneau noted that the idea behind LEEFF is to provide support to large enterprises with credit needs that aren’t being met through conventional financing options.

LEEFF is available for large for-profit enterprises in all sectors, except for those in the financial sector. According to CEEFC’s factsheet on LEEFF, certain not-for-profit enterprises, such as airports, could also be eligible for the program but companies that have been found guilty of tax evasion are not eligible.

The federal government is making available loans of $60 million and above, with Morneau adding that the size of the individual loans will be decided on a case-by-case basis based on the companies demonstrating need. Assessments will be based on the applicant’s cash flow needs for the next 12 months.

The loan will be provided as two loan facilities: an unsecured facility equal to 80 percent of the aggregate loan and a secured facility equal to 20 percent of the aggregate loan amount. The loan will be advanced in tranches over a 12 month period. The support will come with an interest rate of 5 percent for the first year, which will be increased to 8 percent in the second year, with a further 2 percent increase each year thereafter.

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The duration of the unsecured facility will be five years and the borrower may prepay the loan at any time without penalty. Any companies receiving LEEFF loans are subject to certain requirements including, “strict limits” to dividends, share buy-backs, and executive pay; publishing annual climate-related disclosure reports; and demonstrating how the companies intend to preserve employment and maintain investment activities.

Morneau added on Wednesday that if the borrower is a Canadian public company it must issue warrants with the option to purchase common shares in the company totalling 15 percent of the principal amount of the loan. The warrants, he said, are meant to enable CEEFC to share in the upside of borrowing company’s recovery. Non-publicly traded companies will be required to provide CEEFC with compensation in the form of additional fees at a comparable value to the warrants for the public company.

The finance minister highlighted that the idea behind providing loans to large businesses is about creating best-case scenarios and to preserve jobs and firms and “get through these times to what will be the next challenge.”

StartUp HERE Toronto is a publishing partner of Betakit and this article was originally published on their site.