Accessing Business Loans through the Canada Emergency Business Account

On March 27^th, the federal government announced the Canada Emergency Business Account (CEBA), which will provide loans with favourable terms to small businesses in an effort to help businesses to continue to operate during the COVID-19 pandemic.  Our understanding of the CEBA loan program is based on information we have obtained from two of Canada’s largest financial institutions. An updated outline of the CEBA can be found here.

Loan Terms

• Up to $40,000 loan to help pay operating costs than cannot be deferred as a result of COVID-19
• Interest-free, government-guaranteed
• $10,000 of the $40,000 loan is eligible for forgiveness if the remaining $30,000 is fully repaid on or before December 31, 2022
• If the loan is not repaid by December 31, 2022, the debt is converted into a three year term loan, with an interest rate of 5%

Eligibility

To be eligible for the loan, a business or not-for-profit must have:

• An operating company registered in Canada
• 2019 annual payroll between $50,000 and $1 million

How to Apply

The CEBA loans will be available the week of April 6^th and businesses must apply through the financial institution that holds its primary Business Operating Account.  It is our understanding that the applications for this product must be made online.  Feel free to contact your commercial account manager with any clarification you may require on their respective CEBA loan product.