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How to apply for the $40,000 Canada Emergency Business Account (“CEBA”)?

How to apply for the $40,000 Canada Emergency Business Account (“CEBA”)?

Announced earlier this month by the Federal government, CEBA is now available for qualifying businesses. Applications are made through your business’ primary financial institution. It provides an interest free loan of up to $40,000 to eligible businesses to assist with their immediate operating cash flow needs.

If repaid prior to December 31, 2022, 25% of the amount loaned ($10,000) will be forgiven. It also has no principal repayments during this period.

If the loan is not repaid by December 31, 2022, it can be converted into a 3-year term loan, and will be charged an interest rate of 5%, payable monthly. It will still not incur any principal payment requirements until December 31, 2025.

Eligible Businesses:

  • The business must have a CRA Business Number and be operational on or before March 1, 2020.
  • The business must have a bank account with a financial institution on or before March 1, 2020, and must be in good standing with that bank. Businesses that operate using a personal bank account will not be eligible. Businesses cannot apply at multiple banks.
  • 2019 payroll of $50,000 to $1,000,000 as reported in Box 14 of the business’ 2019 T4 Summary.
  • Types of eligible expenses include: payroll, rent, utilities, property tax, and scheduled payments on existing debt, etc.
  • Expenses not eligible include: prepayment of existing debt, management bonuses, dividends, etc.

Application process:

  • Businesses must apply directly through their primary financial institution and applications must be submitted online.
  • Financial institutions are expected to start accepting applications by April 9th.

Additional information:

  • If you receive a loan through the CEBA, it does not preclude the business from participating in other COVID-19 programs, such as the 75% wage subsidy.
  • Companies which are “Associated” for tax purposes, do not have to share the loan; each qualifying company in the corporate group can apply.
  • Each business must make a separate application.
  • No credit check will be performed during the approval process.


Your HS & Partners Team