Here’s an update for our fellow Canadians; Bill Morneau, Finance Minister, announced on Twitter that the expanded Canada Emergency Business Account (CEBA) applications are available through the large banks in Canada.
What Is CEBA?
It was on April 9 of this year that the government released the news that the Canada Emergency Business Account (CEBA). The CEBA provides zero-interest (to some degree) pardonable lending, which can reach the value of up to $40,000 for those small organizations that have experienced lower income as a result of the COVID-19 pandemic. Along with the diminished revenue, businesses are still facing ongoing non-deferrable costs, like employment costs, taxes, insurance, utilities, and rent. In a nutshell, if the loan balance is repaid on or before December 31 2022, 25% of the loan amount is forgiven (up to the value of $10,000).
CEBA was initially introduced and made available to businesses with 2019 payroll ranging from $50,000 to $1 million. From there, the government expanded the grounds of eligibility and increased the payroll criteria to between $20,000 and $1.5 million. Unfortunately, since the requirements were still based on the 2019 payroll, many organizations did not qualify.
On May 19 2020, Prime Minister Trudeau announced that the new eligibility clause would be introduced for the sake of inclusion.
According to the Prime Minister, if you fall under the category of being a “sole owner-operator of a business, if your business relies on contractors, or if you have a family-owned business and you pay employees through dividends, you will now qualify.”
Why is this all relevant right now, you may ask? On June 15, 2020, the Minister of Finance stated that applicants for the CEBA under the revised eligibility criteria could apply from June 19 2020.
Applying For The CEBA
Small businesses and non-profits are encouraged to seek advice from their financial institution when applying for these loans.
If you are interested in this loan possibility, there are three main pieces of information to complete the application that you will need:
- The name of the financial institution with which you applied; and
- Your nine-digit business number; and
- Paper or electronic copies of Agreements/ Invoices/ Receipts that are to be uploaded in support of your 2020 Eligible Non-Deferrable Expenses.
Get in touch with us today, and we will advise you on the best course of action for your small business and weigh up the likelihood of taking advantage of this lending opportunity. For comprehensive accounting services in Vancouver BC that you can trust, contact Accounting Re-Imagined today.