If you didn’t know, there are banks helping people during coronavirus and the difficult times right now. The COVID-19 pandemic is having a bad effect on Canadians. Many businesses have had to shut down. And many workers have lost their jobs. That means there are millions of Canadians that are seeing less income. But bills still need to be paid. We don’t know when this pandemic will end. But until then, Canadians are financially struggling. Millions of Canadians already applied for Employment Insurance (EI). Many others also applied for government assistance. These programs are meant to give Canadians financial support.
Right now, Canadians who have been laid off need all the help they can get. And businesses that had to shut down need help too. Thankfully, the government and many businesses are doing what they can to help out. And that includes banks. While the government is helping, they also expect banks to help out too. And they are. Banks play an important role in the economy, so it’s crucial that they step in. Many banks and lenders are working with their clients to help. They are offering options to ease the financial burden.
Here are some ways that Canadians are being helped by banks in Canada.
TD Bank is helping individuals in many ways. Here are just some of the things this bank is doing to help.
Mortgage payment deferral – Many people cannot afford their mortgage payments because of lost income from COVID-19. They might be able to defer their mortgage payments. They can do this for up to 6 months. But this means that interest will still continue to accrue. It will still have to be paid. Homeowners need to understand this before they defer their mortgage payments.
Personal loan deferral – Individuals may also be able to defer their personal loan payments. If they have a loan, their installments can be postponed. Again, interest will still accrue.
Credit card payment deferral – There is also the option to defer credit card payments during the COVID-19 crisis.
TD Bank is also stepping in to help businesses survive the coronavirus pandemic. It is helping business owners get the financial relief they need through their TD Helps program. To help businesses, TD Banks is helping them apply for the following:
Canada Emergency Business Account (CEBA)
The government of Canada recently introduced the Canada Emergency Business Account (CEBA) program. It is meant to provide small businesses with up to $40,000 with no interest. The funds can be used to pay for business operating expenses.
Businesses will have to show that they paid between $20,000 to $1.5 million in 2019 in total payroll. They can apply through TD Bank. As much as $10,000 of the loan may also be eligible for forgiveness.
Canada Emergency Wage Subsidy (CEWS)
This program gives qualified employers a 75% payroll subsidy for employee wages for up to 12 weeks. It can be retroactive from March 15 to June 6, 2020.
Business owners will have to apply online through the Canada Revenue Agency (CRA).
Small Business Banking Principal Payment Deferral
Businesses can request to defer their business loans. They can defer up to 4 monthly principal payments’ worth of business term loans. They can also defer up to 6 months on a real estate secured business term loan.
New credit requests
TD Bank has its own program that lets business owners request credit to help with cash flow issues.
EDC Business Credit Availability Program (BCAP)
This program offers mid-sized to large businesses with operating credit to help pay for operations. It includes a credit of $6.25 million maximum. It also includes 80% of the loan guaranteed by the federal government.
Business Development Canada (BDC) Co-Lending Program
TD Bank can co-lend term loans to small and medium-sized businesses to help with cash flow issues.
RBC is doing what it can to help clients during this difficult time. For personal individual clients, the bank is offering its RBC Client Relief Program. This is meant to provide temporary financial relief. These options include:
Payment deferrals – RBC is allowing payment deferrals. This is just like TD Bank and other financial institutions. This can be applied to things such as mortgages, personal loans, credit cards, and auto loans.
Fee waivers – RBC is also allowing for fee waivers. These include stop payment and ATM statement fee waivers. Clients can also get reimbursed for 50% of their credit card interest fees.
For business owners, RBC is also offering assistance. This is meant to help relieve financial pressures.
The bank encourages customers to take advantage of the CEBA benefit. This is being offered to businesses. Business owners can apply for this benefit directly through RBC.
To help clients financially because of the coronavirus crisis, BMO is also offering help. To help individuals, BMO has introduced a financial relief program for those impacted by the coronavirus. The bank has flexible options for existing customers affected by COVID-19.
To help with loans, BMO is offering to defer payments for up to six months. This includes loans such as:
- Personal loans
- Installment loans
- Auto loans
- Credit cards
- Lines of credit
With this program, payments are deferred but interest will still continue to accrue. Terms of the loan will stay the same.
For businesses, BMO is helping them apply for the Canada Emergency Business Account (CEBA) benefit. This offers qualifying businesses with an interest-free loan to help cover operational costs. BMO is also assisting small business owners with:
- BDC Co-Lending Program
- EDC Loan Guarantee
- Canada Emergency Wage Subsidy (CEWS)
BMO promises to help make packages to fit business owner needs. Options can include:
- Payment deferral on small business credit cards
- Payment deferral on credit line for business
- Payment deferral on the principal of a small business loan
- Increases in small business operating lines
Clients of CIBC can expect to get some financial help. Here are some ways that the financial institution is helping:
- Mortgage deferral up to 6 months for financial hardship caused by COVID-19
- Credit card payment deferral for up to 3 months
- Lower credit card interest rates of 10.99% during the deferral period
- Deferral on loans and line of credit accounts for up to 2 months
CIBC is also helping clients apply for:
Canada Emergency Response Benefit (CERB) – This program is providing $500 a week for 16 weeks. This is for people who lost their income due to COVID-19.
Canada Emergency Student Benefit (CESB) – This program is designed to help post-secondary students.
CIBC is also working with the CRA to help clients get faster benefits through direct deposit.
For businesses, CIBC is helping clients apply for the Canada Emergency Business Account (CEBA). Funds can be deposited in their CIBC Business Operating Account within 5 business days. The bank is also allowing deferrals on:
- Credit cards
- Credit lines
The bank is also allowing early withdrawal of funds in non-registered GICs without penalty.
Scotiabank is also doing its part to help out its licence. This includes both individuals and business owners. Here are some ways that it is helping people during COVID-19:
Canada Emergency Response Benefit (CERB) application – Clients can apply for the CERB through Scotiabank. With Scotiabank’s help, clients can get their funds deposited faster. People can apply for direct deposit through mobile or online banking.
For businesses, there are banking relief measures being given. These include:
- EDC Business Credit Availability Program (BCAP)
- BDC Business Continuity Program (BCAP)
- Direct Deposit for your business (CEWS)
National Bank of Canada
The National Bank of Canada is one of the biggest banks in the country. It is also doing what it can to help Canadians.
The bank is even doing Facebook Live events. They do this regularly to answer people’s questions. Canadians can log on and ask questions they might have.
National Bank is also taking other steps to help Canadians. This includes deferrals on:
- Credit card payments
- Personal loans
The bank is also helping clients apply for government programs. This includes:
All of these programs are described above. Most banks helping people during coronavirus wish they could be doing more. They are all offering similar assistance programs. As long as you are a client, you can get assistance from your bank.
Credit unions are also doing their part. So are lenders.
Will Deferred Payments Affect Credit Scores?
Many banks are offering loan payment deferral. This was described above. But many Canadians might wonder if deferred payments will pull their credit score down. The answer is not so clear. Missed payments usually get reported to credit bureaus. This results in a negative effect on credit scores. But if a person is allowed to defer their loan payment, their credit score shouldn’t suffer. But credit bureaus might not know that a missed payment was deferred by a bank. Credit bureaus might just see the payment as missed. If that happens, credit scores can be hurt.
It’s up to banks to report payment situations properly. Also, Canadians should pull their credit reports. This will let them see what effect a deferred payment is having on their credit score.
Are you a member of one or several banks helping people during coronavirus? The pandemic is negatively affecting everyone in Canada. Both businesses and individuals are suffering. That is why it is so important that entities like banks help out. They have the power to offer financial relief to their clients. Luckily, they are working with their clients to provide financial help. If you are having financial difficulty, reach out to your bank.
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