The federal government has revealed that the Canada Emergency Business Account (CEBA) is now available to businesses that did not have a business bank account before March 1.
“With this change, an even greater number of small business owners will be able to access this important financial lifeline.”
The CEBA provides interest-free loans of up to $40,000 to small business and non-profit organizations that have experienced reduced revenues due to the COVID-19 pandemic. The loan is meant to cover ongoing costs, such as rent, utilities, insurance, taxes, and wages. The program was first introduced and passed in parliament in April, among a number of other federal programs for businesses.
To be eligible following the latest modification to CEBA, businesses must have been operating as a business as of March 1. Although they are no longer required to have had a business account before March 1, they are still required to open a business account at a Canadian financial institution that is participating in CEBA in order to qualify for the program. The deadline to apply for CEBA is December 31, 2020.
Since its launch, the government has made several modifications to the program intended to support more Canadian small businesses. The government increased the payroll eligibility range from between $50,000 and $1.0 million to between $20,000 and $1.5 million.
The most recent change came earlier this month, when the government made additional loans of $20,000 available to small businesses, with $10,000 of those eligible to be turned into forgivable loans if paid back by a certain date. Repaying the balance of the CEBA loan on or before December 31, 2022, will result in loan forgiveness of 25 percent, or up to $10,000.
Canada’s Deputy Prime Minister and Minister of Finance Chrystia Freeland claimed the CEBA has supported over 774,000 Canadian small businesses and not-for-profits so far. According to the CEBA’s statistics page, approximately $30 billion has been deployed through the program as of October 22.
“With this change, an even greater number of small business owners will be able to access this important financial lifeline,” Freeland added.
Dan Kelly, president of the Canadian Federation Of Independent Business (CFIB) said the group had been lobbying for this change to the program, noting the government promised the change in mid-May.
“Those businesses that have been able to hang on for seven straight months without this support will welcome this news,” Kelly said in a tweet Monday. “I’m also thinking today of the many that already failed before this change was put in place.”
The latest update to CEBA comes a month after the Liberals promised an expansion of the program in its throne speech. That throne speech also included the government’s intention to extend the Canada Emergency Wage Subsidy (CEWS) to summer 2021. The federal government has since revealed what the wage subsidy could look like until the end of its tenth period in December, following the announcement of the program’s extension to June 2021.
Image source Justin Trudeau via Flickr.