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Additional Canada Emergency Business Account Details

Posted
April 3, 2020
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Further to our earlier article with respect to the Canada Emergency Business Account (CEBA) financing program, please see additional information below which we have obtained from one of the large financial institutions. Of particular note for companies with multiple business entities, it appears that each entity has the ability to obtain its respective $40,000 CEBA loan provided that entity otherwise meets the qualification criteria.

Terms
  • The $40,000 government-guaranteed loan helps eligible businesses pay for operating expenses, payroll and other non-deferrable expenses which are critical to sustain business continuity.
  • Until Dec 31, 2020, the CEBA will be funded as a revolving line of credit.
  • After Dec 31, any outstanding balance will be converted into a non-revolving 5-year term loan, maturing on Dec 31, 2025, when the balance must be paid in full.
  • No interest is applied until Jan 1, 2023, when interest accrues on the balance of the term loan at 5% per annum, payable monthly on the last day of each month.
  • If 75% of the balance of the term loan (as of Jan 1, 2021) is paid on or before December 31, 2022, the remaining balance of the term loan will be forgiven.
    • Ex. If the balance is $40,000 on January 1, 2020, and $30,000 is repaid by Dec 31, 2022, the remaining $10,000 is forgiven.
  • If the 75% is not repaid on or before Dec 31, 2022, the full loan balance and all accrued and unpaid interest will be due and payable on Dec 31, 2025.
Eligibility
  • The business must have an existing business deposit account with a participating financial institution that was opened prior to March 1, 2020.
  • The business has been registered and operational on or before March 1, 2020.
  • The person enrolling must have the ability and authority to bind the organization.
  • The business’s payroll expense is between $50,000 and $1 million. Proved by providing:
    • Employer account number, as reported at the top of the 2019 T4 Summary of Remuneration Paid
    • Employment income reported in Box 14 of the 2019 T4 Summary of Remuneration Paid
    • A copy of the 2019 T4 Summary of Remuneration Paid
  • The funds must be used to pay operating costs that cannot be deferred, such as payroll, rent, utilities, insurance, debt payments and property tax.
Enrollment
  • Each financial institution’s enrollment is unique, but the CEBA enrollment is available online beginning the week of April 6, 2020. To prepare:
    • Read your primary financial institution’s guidelines on their website
    • Ensure all of your contact information is up to date
    • Locate your 2019 T4 Summary of Remuneration Paid statement

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