Businesses with no payroll may now be eligible for a Canada Business Emergency Account (CEBA) loan after the federal government expanded the eligibility criteria on Monday.
The ruling affects business owners who are self-employed or sole proprietors, family businesses who pay their employees through dividends, and owners who only employ contractors. Prime Minister Justin Trudeau said more details on the request would come at a later date, including more help for business owners operating through a personal bank account instead of a business account, and for new businesses that have not yet filed a tax return.
âBusinessesâ¦ are the backbone of our economy and the lifeblood of our communities,â Trudeau said in Monday’s announcement. âWhether it’s the CEBA or the Extended Wage Subsidy, we’re right in your corner.
Small business owners and industry advocates protested the minimum payroll eligibility requirement of $ 50,000 when it was first announced on April 9. They said it excluded family businesses or sole proprietors who were self-employed.
Mary NG, Minister of Small Business, Exports, Promotion and Trade, said the government had heard the complaints loud and clear.
âThroughout this crisis, we have listened to what small businesses have told us about what works, what doesn’t and what needs to be improved,â Ng tweeted Tuesday. âThat’s what today’s announcement to expand eligibility for the Canada Emergency Business Account was all about. Our work continues.
Business groups like the Canadian Federation of Independent Business have welcomed the move, but say the government must act quickly to make up for lost time.
CFIB President Dan Kelly said he was “very happy” with Trudeau’s announcement, but added that most small business owners went two months without an income. They will need help quickly with another rent deadline looming on June 1.
âThe initial $ 40,000 may not be enough for many businesses that continue to shut down or those facing a long payback period,â Kelly wrote in a statement.
The Prince Albert Chamber of Commerce also welcomed the news. CEO Elise Hildebrandt said this will make it easier for small businesses to access the supports they need so badly.
“You still want a few more changes, because I know a few companies that it still doesn’t include, but I’m grateful that the money has become available and they have changed these guidelines to help our businesses more,” a- she explained.
This is the second time that the federal government has amended the CEBA’s application guidelines. They reduced the minimum wage requirements from $ 50,000 to $ 20,000 on April 16.
CFIB says 50% of Canadian small business owners could not reopen if COVID-19 restrictions remained in place after May. About 80 percent of Canadian small businesses have closed completely or partially since the start of the COVID-19 pandemic, according to a CFIB survey.
The CEBA allows small businesses to apply for forgivable loans up to $ 40,000, 25% of which is repayable if repaid by December 31, 2022. Over 600,000 loans have been approved since its launch in April .