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Are you eligible for CEBA loan and how to apply

on Tue, 04/14/2020 - 19:21

*Updated on April 16, 12:45pm - updated program details

Ok... so we are finally getting some details on the CEBA (Canada Emergency Business Account) loan for small businesses.... 

Here we go, are you eligible? The criteria seems to be very strightforward. 

- Canadian-operated businesses that have a payroll of $20,000 to $1,500,000 in 2019 as reported in Box 14 of the business’ 2019 T4 Summary, as long as you do not run a union, charity, or religious organization;
- your business must have a CRA Business Number and be operational on or before March 1, 2020;
your business needs to have an active business account at a financial institution on or before March 1, 2020 and have to be at good standing with your bank;
- loans proceeds have to be used for following eligible expenses include:

  • payroll, rent, utilities, property tax, and scheduled payments on existing debt, etc.; and NOT 
  • prepayment of existing debt, management bonuses, dividends, etc.

You will ONLY apply through your primary bank, where you do most of your daily banking with, do not attempt to apply for multiple loans through different banks as that will in legal consequences. The good thing is, no credit check will be perform during the application process, so the bank cannot decline your application simply because you have bad credit.

Applications are being submitted through your online banking and the banks started to accept applications on April 9, 2020. Your bank will have more information on it.

Are you eligible, but not sure what this is?

The CEBA is part of the federal government’s loan and loan-guarantee program for small and medium-sized businesses because of the COVID19 pandemic.​ CEBA provides a loan of up to $40,000 to eligible businesses. If repaid fully prior to December 31, 2022, 25% ($10,000) of the loan is forgiven. If the loan is not repaid by December 31, 2022, it will be then converted into a 3-year term loan, at interest rate of 5%, payable monthly. And there is no principal repayment needed until December 31, 2025.

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