Today the federal government announced an expansion to the eligibility criteria for the Canada Emergency Business Account (CEBA), to now include many owner-operated small businesses.
The changes to the CEBA are intended to allow more Canadian small businesses to access interest free loans that will help cover operating costs during a period when revenues have been reduced, due to the pandemic.
The program will now be available to a greater number of businesses that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.
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, and to have filed a 2018 or 2019 tax return.
- 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.
Expenses will be subject to verification and audit by the Government of Canada. Funding will be delivered in partnership with financial institutions. More details, including the launch date for applications under the new criteria, will follow in the days to come.
Notably to date, over 600,000 small businesses have accessed the CEBA, and the government will work on potential solutions to help business owners and entrepreneurs who operate through their personal bank account, as opposed to a business account, or have yet to file a tax return, such as newly created businesses.
More Key Information About The CEBA:
- $40,000 line of credit or loan, depending on financial institution
- Government-backed (guaranteed)
- Intended to be used for funding operational expenses, including commercial rent and utilities
- Must have payroll between $20,000 and $1.5 million in 2019
- $10,000 is non-repayable if balance is repaid by Dec. 31, 2022
- New businesses, self-employed and those who pay themselves by dividends may not qualify
- Tips for applying here: https://wardlegal.ca/31586368607013