Canada Emergency Business Account (CEBA)

May 19, 2020

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Announced by the Government of Canada on March 27. Original article posted April 9, 2020. Updated with new information as it arises.

What is the Canada Emergency Business Account (CEBA)?

  • A $40,000 government-guaranteed loan to help eligible businesses pay for operating expenses, payroll, and other non-deferrable expenses, which are critical in order to sustain business continuity.

  • Will be funded as a revolving line of credit for $40,000 until December 31, 2020
  • Will be converted to a non-revolving 5-year term loan on December 31, 2020 (must be paid in full by December 31, 2025)
  • Interest-free until January 1, 2023
  • After January 1, 2023, interest accrues on the balance at a rate of 5% per annum, payable monthly on the last day of each month.
  • If you pay 75% of the balance of the loan (balance at January 1, 2021) on or before December 31, 2022, the remaining balance will be forgiven (if your loan is the full $40,000 at January 1, 2021, and you repay $30,000 on or before December 31, 2022, the remaining $10,000 will be forgiven.

Who is eligible for CEBA?

  • Sole Proprietors
  • Corporations that pay dividends rather than salaries.
  • Businesses that engage independent contractors.
  • Small Businesses
  • Not-for-profit organizations.
  • Organizations must demonstrate that they had a total payroll between $20,000 and $1.5 million in 2019.
  • No additional eligibility requirements have been provided at this time.

How to apply?

  • Through your financial institution. Each financial institution may have its own set of requirements for application.
  • The application is expected to be ready this week

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