Update: May 6, 2024
CERB reviews continue as CRA works to collect what it deems as billions in non-eligible payments. However, if you received a notice for repayment but believe you were eligible under the rules, there are opportunities for 2 additional reviews and should you wish, the potential for a judicial review and contacting the Taxpayer’s Ombudsperson’s office may also help.
Article: https://loom.ly/oCiR27c
Ombudsperson: https://loom.ly/O6j0Rls
(Updated 01.13.2022)
CEBA loan repayment has been extended to December 31, 2023 (from Dec 31, 2022) for recipients to receive the forgiveness.
If loans are not repaid by December 31, 2023, the loans will be converted to two-year terms loans with interest at 5%. The loans would be fully repaid by December 31, 2025.
Applicants have now closed (updated April 2022)
The Canadian Emergency Business Account will now provide up to $40,000 in government-guaranteed loans to businesses that had payrolls last year between $20,000 and $1.5 million. The aim is to help cover their operating costs during a period where their revenues have been temporarily reduced. Applications will be available beginning the week of April 6th. Applications through credit unions and banks will be available starting Thursday, April 9th, 2020. As of December 4, 2020, hard-hit small businesses and not-for-profits could be eligible for an additional $20,000 CEBA loan, on top of the $40,000 already available.
An expansion to the eligibility criteria has been announced to include many owner-operated small businesses. This extended measure will help small businesses protect the jobs that Canadians rely on.
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.
What will you get?
- A loan of up to $40,000
- 0% interest until Dec 31, 2022,
- No minimum monthly principal payments until December 31, 2022,
- Ability to make principal repayments at any time,
- Up to $10,000 (25%) loan balance forgiveness, as well as no interest or service fee charges, is available provided the outstanding balance is fully paid on or before Dec 31, 2022, and
- Conversion to a 3-year term loan at 5% interest if not repaid in full by Dec 31, 2022.
To summarize, when you are approved and accept the relief measure, you will have access to up to $40,000 with 0% interest rate, no fees, and no principal repayments until December 31, 2022. Applications are processed through your bank.
Who can apply?
- Operating businesses (i.e. not a holding company) in operation on March 1, 2020.
- Businesses with payroll expenses in the 2019 calendar year between $20,000 and $1,500,000. You will need to provide:
- Your payroll account number,
- Your employment income is reported in Box 14 of the 2019 T4 Summary, and
- A copy of your 2019 T4 Summary when requested upon audit.
- Businesses that agree to use funds to pay for operating costs such as payroll, rent, utilities, insurance, and property tax.
- Businesses with an operating account at your primary financial institution opened prior to March 1, 2020.
- Businesses not applying at any other financial institution.
- Businesses that understand applying for this benefit at more than one financial institution, may result in prosecution by the federal government.
- Sole proprietors, businesses that rely on contractors and family-owned corporations that pay employees through dividends.
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NPOs and Charities that file either a T2 Corporate Income Tax Return or T3010 Registered Charity return and that generate a portion of its revenue from the sales of goods or services that also meet the other qualification requirements may be eligible to apply for the CEBA.
Expanded Eligibility:
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.
To see the most updated list on expanded eligibility visit our blog post here.
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.
Applications are expected to be processed through your bank’s online platforms starting the week of April 6, 2020. Log in to your online banking for more details.
Please note that it is best practice to contact your financial institution to see what other special measures they are taking that could impact you. There may be options for payment holidays, interest rate reductions and credit adjustments to help your business through this trying time.
To view more details on the CEBA visit the Government of Canada website here.
A summary of all government support programs related to COVID-19 can be found here.
As always, KBH Chartered Professional Accountants is here to ensure you have everything you need to move forward. Your success is our goal. We are here to Help You Succeed.