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