Loans delivered by the Province of Ontario under the Regional Development Program are performance-based loans (see section “Types of Support”) that provide for a portion of the loan to be forgiven if contracted targets are met with respect to investment, job creation and payroll.

  • during the project period, loans will be interest-free (0%)
  • during the repayment period, after the project completion date, interest will be charged at Ontario’s cost of borrowing plus 3%
  • any unearned portion of the loan will be due immediately following the project completion date

If your project is approved for funding, loan terms will be subject to the following conditions:

  • mandatory prepayments of principal for investment shortfalls due at project completion date (interest bearing from project completion date)
  • companies can repay loans at any point without penalty. Typically, the principal repayment is spread equally over four years after the project completion date

Evaluating loans

Loans for projects will be assessed against the following:

  • other than the funding request, the applicant has secured all finances required to complete this project (or ensure they will be secured before the project begins)
  • the applicant has generated positive debt service coverage ratio (DSCR) in the previous three years. The applicant will be required to provide this information in detail
  • DSCR is a measurement of the cash flow available to pay current debt obligations
  • The applicant is forecasting a positive DSCR over the term of the loan. This will form an integral part of your assessment and will be subject to financial due diligence

The applicant will be required to enter into a loan agreement and provide security satisfactory to the province.

The province may secure services of third-party due diligence providers to review loan requests, at the ministry’s expense. Additional information may be requested. Delays in providing information may impact the funding decision timelines.