Industry Canada

Industry Canada

September 04, 2009 13:00 ET

Canada's Economic Action Plan Helps Auto Parts Manufacturers Resume Production Through The Business Development Bank of Canada

OTTAWA, ONTARIO--(Marketwire - Sept. 4, 2009) - The Business Development Bank of Canada (BDC) has introduced a new temporary Purchase Order Financing initiative to help shuttered auto parts manufacturers resume production. As part of Canada's Economic Action Plan's Business Credit Availability Program (BCAP), this initiative will 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," said the Honourable Tony Clement, Minister of Industry. "Small businesses represent 98 percent of business establishments in Canada. Our economic recovery will be driven in large part by their success."

"This type of financing has proven to be timely and effective in improving access to credit for Canadian businesses," said the Honourable Jim Flaherty, Minister of Finance. "It is a proactive means to help automotive manufacturers and Canadians."

To be eligible for the financing, a business must be commercially viable and Canadian, be involved mainly in auto parts manufacturing with at least 40 percent 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 Mr. Peter Lawler, Senior Vice President, Operations for the Ontario Region at BDC. "This initiative provides much-needed working capital, enabling manufacturers to accept more orders and thereby sustain and grow their businesses."

"The dizzying freefall in production of 50 to 70 percent quickly led to a cash flow crisis for automotive suppliers," said Mr. Gerry Fedchun, President of the Automotive Parts Manufacturers' Association. "As production increases to meet demand, this initiative is exactly what is required to allow Canadian automotive suppliers to access financial resources and put Canadians back to work. We applaud the BDC on this initiative."

Through BCAP, the BDC and Export Development Canada (EDC) are providing at least $5 billion in direct lending and other types of support and facilitation to businesses with viable business models whose access to financing would otherwise be restricted. Close cooperation with private sector lenders allows this program to fill market gaps and leverage additional lending by private sector institutions in cases where joint participation facilitates private action.

The BDC is Canada's business development bank. From more than 100 offices across the country, the BDC promotes entrepreneurship by providing highly tailored financing, venture capital and consulting services to entrepreneurs.

To learn more, please visit the BCAP (http://www.fin.gc.ca/bcap) website or Canada's Economic Action Plan (http://www.actionplan.gc.ca/) website.

This news release is available online on the Canada's Economic Action Plan website (http://www.actionplan.gc.ca/) .

Contact Information

  • Office of the Honourable Tony Clement
    Minister of Industry
    Laryssa Waler - A/Press Secretary
    613-995-9001
    or
    Industry Canada
    Media Relations
    613-943-2502
    or
    Business Development Bank of Canada
    Johanne Bissonnette
    Media Relations Manager
    514-283-7929
    johanne.bissonnette@bdc.ca
    or
    Automotive Parts Manufacturers' Association
    Gerry Fedchun
    President
    416-931-4344
    gfedchun@apma.ca