One of the economic measures announced by the Federal Government to help businesses during the COVID-19 pandemic is the Canada Emergency Business Account.
What is the Canada Emergency Business Account?
The Canada Emergency Business Account will provide interest-free, government-guaranteed loans in the form of lines of credit of up to $40,000 to small business and not-for-profits, to help cover their operating costs during this period where revenues have been temporarily reduced.
Who is eligible?
Businesses and not-for-profits will be eligible for the loan if they have:
- An operating company registered in Canada;
- An annual payroll of between $20,000 and $1.5 million, based on their T4SUM Summary of Remuneration Paid (Updated on April 16, 2020)
How to apply?
Businesses and not-for-profits should contact the financial institution with whom they have pre-existing relationship. Their financial institution will assess their request/application for the loan.
The Canada Emergency Business Account program will end on August 31, 2020. Therefore, you must complete your CEBA application by this date. If applying on the basis of non-deferrable expenses, applicants must upload all supporting documents no later than September 3, 2020.
Important note: Each bank will have their own method of application but most banks are accepting online applications. You may check your bank’s website for any updates.
How to repay loan?
25% of the $40,000 or $10,000 is eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022.
Sources:
https://pm.gc.ca/en/news/news-releases/2020/03/27/prime-minister-announces-support-small-businesses-facing-impacts
https://www.canada.ca/en/department-finance/economic-response-plan.html
