Canada Emergency Business Account (CEBA)

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Apply with Caution for businesses applying for the additional $20,000 CEBA Loan – Pay special attention to the loan amending agreement when applying for the additional $20,000 CEBA loan, as the new agreement the bank will provide for the additional funds will OVERRIDE the original loan agreement terms!

Eligible Non-Deferrable Expenses include

  1. wages and other employment expenses to independent (arm’s length) third parties;
  2. rent or lease payments for real estate used for business purposes;
  3. rent or lease payments for capital equipment used for business purposes;
  4. payments incurred for insurance related costs;
  5. payments incurred for property taxes;
  6. payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet;
  7. payments for regularly scheduled debt service;
  8. payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct your business;
  9. payments incurred for materials consumed to produce a product ordinarily for sale by you; and
  10. any other expense in a category other than the above as may be indicated by the Government of Canada on from time to time.

For the first tranche of the CEBA loans for $40,000, the forgivable portion was 25% or $10,000 and for the expanded tranche of the CEBA Loan for $20,000, the forgivable portion is 50% or $10,000.

For clarity, the portion of forgiveness based on a rate of 25% and the portion of forgiveness based on a rate of 50% are combined into a single tranche of forgiveness, which is only available if all other amounts outstanding are repaid by December 31, 2022. For example, if $60,000 is borrowed, no forgiveness is available unless $40,000 is repaid.

Note: some financial institutions may record your $40,000 loan and $20,000 expansion as two separate loans. For the purposes of loan forgiveness, borrowings and repayments on both loans will be aggregated.

Business owners can apply for support until March 31, 2021 through their Banks and Credit Unions.