Canada Emergency Business Account Expanded on May 19
May 19, 2020
Ottawa, Ontario
Canada Emergency Business Account (CEBA) loans program will be expanded for those:
who are sole owner-operators;
that depend on contractors; and
that are family businesses that pay employees by dividends rather than payroll.
As well, CEBA will be modified to become available to new businesses (those which have never filed a tax return) and businesses which do not have “business accounts” at the bank, but operate through personal accounts.
To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:
a business operating account at a participating financial institution;
a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return; and
eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.
April 2019
To ensure that small businesses have access to the capital they need to see them through the current challenges, the Government of Canada has launched the new Canada Emergency Business Account, which has been implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).
This $25 billion program provides interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus.
Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).
What are the eligibility requirements for the CEBA?
The Borrower is a Canadian operating business in operation as of March 1, 2020.
The Borrower has a federal tax registration.
The Borrower’s total employment income paid in the 2019 calendar year was between Cdn.$20,000 and Cdn.$1,500,000. For applicants with Cdn.$20,000 or less in total employment income paid in the 2019 calendar year:
The Borrower has a Canada Revenue Agency business number and has filed a 2018 or 2019 tax return.
The Borrower has eligible non-deferrable expenses between Cdn.$40,000 and Cdn.$1,500,000. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses will be subject to verification and audit by the Government of Canada.
The Borrower has an active business chequing/operating account with the Lender, which is its primary financial institution. This account was opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with the Lender by 90 days or more as at March 1, 2020.
The Borrower has not previously used the Program and will not apply for support under the Program at any other financial institution.
The Borrower acknowledges its intention to continue to operate its business or to resume operations.
The Borrower agrees to participate in post-funding surveys conducted by the Government of Canada or any of its agents.
Are there any restrictions on how I can use CEBA funds?
The funds from this loan shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.