CANADA EMERGENCY BUSINESS ACCOUNT (CEBA)
November 23, 2020
On October 9, the Government announced that the CEBA program will be expanded to provide eligible businesses and NPOs with an interest-free loan of up to $20,000, in addition to the original CEBA loan of $40,000. Half of this additional financing would be forgivable if repaid by December 31, 2022. In order to access the additional $20,000, businesses will need to attest to how they have been affected by COVID-19.
On October 26, 2020 the government announced that CEBA will be available to businesses that have been operating out of a non-business banking account.
To be eligible, businesses must:
have been operating as a business as of March 1, 2020;
successfully open a business account at a Canadian financial institution that is participating in CEBA; and
meet the other existing CEBA eligibility criteria.
The deadline to apply for CEBA is March 31, 2021.
Other notable developments regarding CEBA are:
CEBA FAQ website has been updated to include information on the CEBA Pre-screening Tool, and what to do if you miss the call back from the CEBA call centre.
CRA has confirmed that the forgivable portion of the CEBA loan is to be included in income in the year the loan was received.
The list of eligible non-deferrable expenses now includes materials consumed to produce a product ordinarily offered for sale by the Borrower. Examples include raw materials, ingredients, supplies, seed or livestock feed. Finished goods inventory or purchases of capital assets are not included.
July 28, 2020
As previously announced, the CEBA program has been expanded, and as of June 26, 2020 applications under the CEBA program are being accepted under two distinct streams, the “Payroll Stream”, and the “Non-Deferrable Expenses Stream.”
Applications under the Payroll Stream (total employment income paid to employees in 2019 greater than $20,000 and less than $1,500,000) will be completed directly through the financial institution in which your business holds its primary business chequing / operating account. The Government of Canada will notify your financial institution and provide funding for your CEBA loan.
Applications under the Non-Deferrable Expenses Stream (total employment income paid to employees in 2019 of $20,000 or less, and 2020 Eligible Non-Deferrable Expenses - subject to adjustments for support or subsidies under other Government of Canada COVID response programs - greater than $40,000 and less than $1,500,000) will follow a two-step process:
Step 1: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing / operating account. The financial institution will then direct applicants to Step 2 of the application process.
Step 2: Following the initial application through your financial institution, applicants will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application.
If successful, the Government of Canada will notify your financial institution and provide funding for your CEBA loan.
Additional documents required will include:
The name of the financial institution where you submitted your application;
Your 9-digit business number (same number you used in your application with your financial institution); and
Electronic or paper copies of Receipts / Invoices / Agreements to be uploaded as evidence of your 2020 Eligible Non-Deferrable Expenses.
The CEBA FAQ on the program’s web-site has also been updated to clarify which costs qualify as non-deferrable expenses for 2020.
For more details click on the following link: https://ceba-cuec.ca/faq/#
May 26, 2020
Since our last update on May 4, 2020, the federal government has extended and expanded certain previously announced COVID-19 economic measures, as well as clarifying program rules and administrative issues through the Frequently Asked Questions section of CRA’s website.
On May 19, 2020, the government announced that the CEBA will be expanded.
The CEBA loans program will be expanded for those:
who are sole owner-operators;
that depend on contractors; and
that are family businesses that pay employees via dividends rather than payroll.
As well, the CEBA will be modified to become available to new businesses (those which have never filed a tax return) and businesses which do not have “business accounts” at the bank, but operate through personal accounts.
To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:
a business operating account at a participating financial institution;
a Canada Revenue Agency business number;
to have filed a 2018 or 2019 tax return; and
to have eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.
April 21, 2020
Since our last update, the Government has continued to expand its COVID-19 relief measures for Canadians. Highlights are as follows:
The eligibility thresholds for the $40,000 interest-free loan program have been expanded allowing businesses that had total payroll between $20,000 and $1.5 million in 2019 to qualify.
