BCAP: Respective Roles of EDC and BDC

EDC and BDC have complementary roles and competencies. Under the provisions of the 2009 budget, which aims to maximize financial support for entrepreneurs during this exceptional period of recession and reduced access to credit, their roles will expand and, in some instances, may appear to overlap. The solution to potential overlap is an efficient referral system. BDC and EDC have created such a system so that companies, regardless of which of the two Crowns they first approach for support, are directed expeditiously to the appropriate one.

In addition, the following criteria will determine whether BDC or EDC is best positioned to support a given company or transaction.

Existing Relationships:
When a company is already a client of either corporation, that Crown should be the first point of contact.

For Direct Financing:
A) For companies with sales under $50 million, BDC should be approached.

B) For companies with sales of more than $50 million and exposure of up to $75 million, either BDC or EDC can support the transaction, depending on the product and type of expertise required.

Sector and structure specialization:

• Sectors and structures better covered by BDC are:
• real estate
• wholesale and retail distribution
• media and communication
• construction
• Sectors and structures better covered by EDC are:
• financial services
• oil & gas exploration, mining
• structured finance
• foreign currency transactions

C) For companies with exposure greater than $55 million EDC should be approached.

For Guarantees:
For facilities from $400,000 to $40 million, financial institutions should refer first to BDC’s Operating Line of Credit Guarantee (OLCG).
The OLCG will be available in spring 2009

For facilities up to $400,000 or beyond $40 million, EDC can provide coverage using its guarantee programs, which have been temporarily expanded to the domestic market.