The federal government has rolled out a series of measures to help Canadian businesses and families weather the COVID-19 pandemic. Here’s everything you need to know about the Canada Emergency Business Account, or CEBA:
What is the CEBA?
The Canada Emergency Business Account is part of the federal government’s loan and loan-guarantee program for small and medium-sized businesses affected by the COVID-19 pandemic.?
The $25-billion program opened to applicants on April 9, and provides a $40,000 loan that is interest-free until Dec. 31, 2022.
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The loans are intended to help businesses meet their financial obligations amid shutdowns of non-essential businesses to slow the spread of the virus.
?CEBA loans are backed by the government, and up to 25 per cent of each loan, or $10,000, is eligible for forgiveness if the rest is paid on time (by Dec. 31, 2022). For those unable to repay at that time, the loan can be converted into a three-year term loan at an interest rate of five per cent.
“Every entrepreneur who banks with us wants to see their business through this challenging time so they can focus on their ambitions for growth,”?Laura Dottori-Attanasio, group head of personal and business banking at Canadian Imperial Bank of Commerce, said Monday. ?When the program opened to applications last week, she said it was clear from conversations with small business owners that there was an “urgent need for this new source of funding.”
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Canadian-operated businesses that have federal tax registration and a payroll?in the 2019 calendar year of between $50,000 and $1-million, verifiable by Canada Revenue Agency documentation (a T4 summary of remuneration paid, or T4SUM), are eligible. ??
How do you apply?
Qualifying businesses apply online through the bank or?financial institution that holds their primary business operating account.
Applicants need their T4SUM document from the Canada Revenue Agency, as well as their 15-digit CRA business number or employer’s account number. Bank account information is also required. ?
Banks such as Toronto-Dominion Bank, Bank of Montreal and Canadian Imperial Bank of Commerce require those applying to have online business banking set up. ???
Who doesn’t qualify???
Businesses that were?behind on their payments for an existing loan on?March 1 of this year are not eligible for CEBA loans.?
Sole proprietors who use a personal chequing account while operating in the name of a business are not eligible.
?Businesses owned by a government body or an elected official cannot receive a CEBA loan.?
Most union, charitable, or religious organizations are not eligible under the CEBA program.???
How is it working???
Bank of Montreal had processed more than 10,000 applications Monday, and distributed $500 million in CEBA loans.
Royal Bank of Canada had approved 35,439 applications, each for $40,000, for a total of $1.4 billion as of 9 a.m. Monday.
By 3:45 p.m. Monday, CIBC had issued $846 million in loans under the program to 21,150 clients. And on Tuesday, Toronto-Dominion Bank said it had?helped submit more than 70,000 applications, with approximately 50,000 meeting the government-defined eligibility criteria.
The Canadian Bankers’ Association expects to have “CEBA uptake” figures for all its members compiled later this week, according to spokesperson Mathieu Labrèche.