Couple fears for future after BDC won't defer interest payments amid pandemic
'We have no income whatsoever right now, and frankly we're a little panicked'
A Cape Breton couple fears for their future after the Business Development Bank of Canada refused to defer interest payments on their small business loan.
Grant Haverstock and his partner, Jessica KleinHerenbrink, put everything they have on the line in order to open Iron Mountain Wilderness Cabins in Whycocomagh, N.S., last fall.
They contacted BDC a few weeks ago to give warning that the business had to close due to COVID-19.
"We asked them to please defer our principal and interest payments until this thing cleared up, as we have no income whatsoever right now, and frankly we're a little panicked," said Haverstock.
BDC agreed to defer the payments on the principal, but not the interest payments, which amount to almost $1,800, said Haverstock.
"So our payments come out on the first of the month.…I checked the bank and sure enough they bounced our interest payment."
ACOA has deferred all payments
Haverstock said he can't understand why a Crown corporation continues to charge and collect interest from businesses that are closed due to the virus at a time when the federal government is pledging billions in relief to help small businesses,
"BDC has basically told us to go pound sand," he said. "And they also told us that they were taking note of our social media posts."
The couple also received financing for the business through the Atlantic Canada Opportunities Agency. ACOA has deferred their payments for six months.
In a written statement, BDC said the principal payment represents the majority of monthly payments made by its clients, and that's why it has implemented principal postponements for some clients as part of its relief measures.
"We understand that for certain clients who may be in a difficult financial situation, more flexibility could be required," said BDC spokesperson Jean Philippe Nadeau.
"Our teams assess each client's needs on a case-by-case basis and try to provide the best support they can, taking into consideration the business history and financial health prior to the COVID-19 pandemic."
The Canadian Federation of Independent Businesses has not received any similar complaints about BDC to date, said Louis-Philippe Gauthier, provincial affairs director for CFIB in New Brunswick and PEI.
But he said some businesses have reported difficulty in getting through to BDC representatives.
He said CFIB would raise the issue with government.
In the meantime, he suggested Haverstock explore the provincial and federal business loan programs now on offer as part of the pandemic response.
Concerned about credit rating
But Haverstock is reluctant to take on additional debt.
"We can't pay the debt we have now," he said. "And now that they've bounced a payment, I'm sure that's going to show up on our credit report. So we probably won't even qualify for that."
Despite several attempts to contact BDC by email, Haverstock hasn't had any reply since March 24.
"I just don't know how in the heck we're going to get out of this," he said. "It's a little scary right now."
MORE TOP STORIES