May 19, 2020
Cornwall Ontario – The Government of Canada announced the expansion of eligibility criteria for the Canada Emergency Business Account (CEBA) to include many small, owner-operated businesses. This extended measure will help small businesses protect the jobs Canadians rely on.
“Canadians are counting on us to protect their jobs and help them pay their bills during this difficult time,” said Prime Minister Justin Trudeau. “By expanding CEBA, we will give more businesses access to the support they need, so they can help protect the workers and jobs they rely on. Today, we’re helping keep more businesses open and more Canadians working, so we’re better prepared for the recovery ahead.
Changes to CEBA will allow more Canadian small businesses to access interest-free loans that will help cover operating costs during a time when revenues have been reduced due to the pandemic.
The program will now be available to more businesses that are sole proprietors and receive income directly from their business, businesses that rely on contractors, and family businesses that pay their employees through dividends rather than by payroll.
To qualify for the expanded eligibility criteria, applicants with payrolls under $20,000 would need:
- a business operating account at a participating financial institution
- a Canada Revenue Agency business number and have filed a tax return for 2018 or 2019.
- 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.
Expenditures will be subject to verification and audit by the Government of Canada. Funding will be granted in partnership with financial institutions. More details, including the launch date for applications under the new criteria, will follow in the coming days. To date, more than 600,000 small businesses have accessed CEBA, and the government will work on potential solutions to help business owners and entrepreneurs who operate through their personal bank account, as opposed to a business account, or who have not yet filed tax returns, such as newly created businesses.
This measure is part of the Government of Canada’s Economic Response Plan to COVID-19, which puts Canadians first and protecting middle-class jobs. We will continue to help all Canadians and together we will get through this crisis.
- Launched April 9, 2020, CEBA offers zero-interest, partially repayable loans of up to $40,000 to small businesses that have seen their revenue decline due to COVID-19, but face ongoing non-deferrable costs such as rent, utilities, insurance, taxes. , and wage costs. Twenty-five percent of this loan is repayable if repaid by December 31, 2022.
- CEBA is administered by Export Development Canada, which works closely with Canadian financial institutions to provide the loans to their existing commercial banking customers.
- When it was launched, the CEBA was designed to allow rapid deployment of credit to businesses whose payroll in 2019 was between $50,000 and $1 million. The government then expanded the eligibility parameters of the program by increasing the payroll eligibility range between $20,000 and $1.5 million.
- Since CEBA’s launch, more than 600,000 loans have been approved, representing a total of more than $24 billion in credit.
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