The Balancing Muskoka Blog

What is the Canada Emergency Business Account (CEBA)?

What is the Canada Emergency Business Account (CEBA)?

To ensure that small businesses have access to the capital they need to see them through the current challenges, the Government of Canada has launched the new Canada Emergency Business Account, which has been implemented by eligible financial institutions in cooperation with Export Development Canada (EDC).

This $25 billion program provides interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of the COVID-19 virus.

This will better position them to quickly return to providing services to their communities and creating employment.

Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).

How do I apply for the CEBA?

Small businesses and not-for-profits should contact their financial institution to apply for these loans.

What are the eligibility requirements for the CEBA?

• The Borrower is a Canadian operating business in operation as of March 1, 2020.
• The Borrower has a federal tax registration.
• The Borrower’s total employment income paid in the 2019 calendar year was between Cdn.$20,000 and Cdn.$1,500,000.
• The Borrower has an active business chequing/operating account with the Lender, which is its primary financial institution. This account was opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with the Lender by 90 days or more as at March 1, 2020.
• The Borrower has not previously used the Program and will not apply for support under the Program at any other financial institution.
• The Borrower acknowledges its intention to continue to operate its business or to resume operations.
• The Borrower agrees to participate in post-funding surveys conducted by the Government of Canada or any of its agents.

Are any Borrowers excluded from the CEBA?

Per the requirements of the Program, as set out by the Government of Canada, the Borrower confirms that:

• It is not a government organization or body, or an entity owned by a government organization or body;
• It is not a union, charitable, religious or fraternal organization or entity owned by such an organization or if it is, it is a registered T2 or T3010 corporation that generates a portion of its revenue from the sales of goods or services;
• It is not an entity owned by individual(s) holding political office; and
• It does not promote violence, incite hatred or discriminate on the basis of sex, gender, sexual orientation, race, ethnicity, religion, culture, region, education, age or mental or physical disability.

Are there any restrictions on how I can use CEBA funds?

The funds from this loan shall only be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.