Federal Government

Refreshed on 2020-11-18

Type

Debt

What

CEBA provides much needed credit for small businesses to pay for immediate operating costs such as payroll, rent, utilities, insurance, property tax, or debt service. It is 100 per cent funded by the Government of Canada.

UPDATES

• As of October 26, 2020, eligible Canadian businesses that currently operating through a personal bank account will be able to apply for CEBA.
• All applicants now have until December 31, 2020, to apply for CEBA.
• COMING SOON* CEBA support is being expanded from $40K to $60K. This expansion will be available to all eligible previous and new CEBA applicants. Stay tuned to the CEBA website for more details, including launch details in the coming weeks

Value

Under CEBA, financial institutions will be able to provide interest-free credit facilities of up to $40,000 to eligible businesses. Additional $20,000 has been increased

• If the loan is repaid by December 31, 2022, 25 per cent (up to $10,000) will be forgiven.
• If the loan is not repaid by December 31, 2022, the remaining balance will be converted to a three-year term loan at 5 per cent interest.

Eligibility

$20,000 to $1.5 million in total payroll in 2019, and operating as of March 1, 2020. This includes smaller (i.e., micro) businesses and other eligible employers such as not-for-profits.

NEW CHANGES: If you are sole proprietor of a business, if your business relies on contractors or if you have a famil-owned business and you pay employees through dividends, you will now qualify.

How to Access it

Contact your primary financial institution to apply. Some financial institutions (ex: RBC) are allowing you to apply directly.

Link

https://www.canada.ca/en/department-finance/programs/financial-sector-policy/business-credit-availability-program.html

What does this mean to your company?

You will be able to get 40,000 in immediate interest free line of credit (basically a cash cushion) for your company to deal with immediate cash needs. If you close $30,000 by Dec 31 2022, the government of Canada will pay the rest of the $10,000.