CEBA will provide interest-free loans of up to $40,000 to eligible businesses. To qualify, businesses will need to demonstrate they paid between $20,000 to $1.5 million in total payroll in 2019. Repaying the loan on or before December 31, 2022 will result in loan forgiveness of 25% (up to $10,000).
The CEBA will be implemented by eligible financial institutions in cooperation with Export Development Canada.
Update June 19th:
The expanded program was due to launch on June 19th, 2020, but was delayed. Details on the new launch date will be provided shortly.
Update June 15th:
The Government of Canada has announced an expansion to the eligibility criteria for the Canada Emergency Business Account (CEBA) to include many owner-operated small businesses with payroll lower than $20,000. This means that owner-operated small businesses that had been ineligible for the program due to their lack of payroll, sole proprietors receiving business income directly, as well as family-owned corporations remunerating in the form of dividends rather than payroll will become eligible this week.
Expanded Eligibility Criteria
To qualify under the expanded eligibility rules, CEBA applicants with payroll lower than $20,000 will need:
- A business operating account at a participating financial institution;
- A Canada Revenue Agency business number;
- A 2018 or 2019 tax return; and
- Eligible non-deferrable expenses of between $40,000 and $1.5 million.
Eligible Non-Deferrable Expense Categories
The Eligible Non-Deferrable Expense categories:
- Wages and other employment expenses to independent (arm’s length) third parties
- Rent or lease payments for real estate used for business purposes
- Rent or lease payments for capital equipment used for business purposes
- Payments incurred for insurance related costs
- Payments incurred for property taxes
- Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet
- Payments for regularly scheduled debt service
- Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct business by the Borrower
Eligible businesses will qualify for financing of up to $40,000, with 25 per cent of this being forgivable based on the current terms of CEBA loans. Businesses can contact their primary financial institution for more information or to apply directly for CEBA.
What if I don't qualify for CEBA?
Businesses that don't meet the eligibility criteria for CEBA can apply for funding under Western Economic Diversification Canada’s Regional Relief and Recovery Fund (RRRF).