Covid Relief Loans: Canada Emergency Business Account (CEBA)
Canada Emergency Business Account (CEBA)
COVID SUPPORT PROGRAMS - FEDERAL
CEBA requirements and deadlines have changed:
Applicants who have received the $40,000 CEBA loan may apply for the $20,000 expansion, which provides eligible businesses with an additional $20,000 in financing.
All applicants have until June 30, 2021, to apply for $60,000 CEBA loan and/or the $20,000 expansion.
CEBA is an interest-free loan of up to $60,000* from the Canadian Government that is administered through your bank. If you pay it back by December 31, 2022, there is loan forgiveness of 25%, up to $10,000 for the first $40,000 and then another $10,000 for the second $20,000. During this time, you can make payments at whatever frequency you prefer. If you are unable to pay it back by December 31, 2022, it turns into a 3-year fixed loan with a 5% interest rate that is paid monthly.
*As of December 4, 2020, CEBA loans for eligible businesses increased from $40,000 to $60,000.
All applicants can now check the status of their CEBA Loan online at: https://status-statut.ceba-cuec.ca/. The loan status website will be able to address the following types of questions:
What is the status of my application? (after 5-7 business days from submission)
Why was my application declined? How can I fix those errors (if applicable)?
Eligibility:
To be eligible for a $60,000 CEBA loan, an applicant must be an active operating business that is a sole proprietorship, partnership or a Canadian-controlled private corporation that was in operation in Canada on March 1, 2020. Other types of business entities are not eligible for a $60,000 CEBA loan. Visit and complete the Pre-screen Tool on https://verify-verifier.ceba-cuec.ca/, Open a business chequing/operating account with your primary financial institution if you don’t currently have one. Apply for CEBA at your primary financial institution.
FAQ:
How long does it take to receive my CEBA Loan?
Once you have applied and submitted all supporting documents (if applicable), and if pre-funding eligibility validation is successful, you should expect to receive funding within 10-15 business days.
Do I need to submit a new application for the $20,000 expansion?
Yes, you will need to submit a new application and attestation to the financial institution that provided you with your original CEBA loan. You will not need to resubmit your original application, or re-upload expense documents.
Who can apply for the $20,000 expansion?
Applicants with a $40,000 CEBA loan may apply for the $20,000 expansion.
I already repaid my original CEBA loan. May I apply for the $20,000 expansion?
Yes, you may apply for the $20,000 expansion at the financial institution that provided you with your original CEBA loan.
For more information on this program, please go to https://ceba-cuec.ca/
Repaying your CEBA loan
Business debt can be a source of worry, especially in an unsettled economy, but the CEBA loan gives you some room to breathe. Before you rush into paying it back, review the repayment terms:
Your loan is interest free before December 31, 2022, and principal payments are not required. If you pay it all back by this date you are eligible to claim the forgivable portion.
If you cannot pay it back (minus the forgivable portion) by Dec 31, 2022, then you are not eligible for the forgivable portion and the full amount will then become a loan that has a 3-year term with a 5% fixed interest rate per year. Only interest payments are required on a monthly basis with the outstanding principal due in full by December 31, 2025.
Depending on the amount of your CEBA loan, the amount that is eligible for forgiveness will vary. The forgiveness benefit allows a portion of your loan to not be required to repay:
If you received a $40,000 CEBA loan, you can repay 75 percent of the total amount ($30,000) by December 31, 2022 and the remaining 25 percent ($10,000) is eligible for a loan forgiveness benefit.
If you received a $60,000 CEBA loan, you can repay 66 percent of the total amount ($40,000) by December 31, 2022 and the remaining 34 percent ($20,000) is eligible for a loan forgiveness benefit.
The forgivable portion of the CEBA loan, $10,000 or $20,000, is taxable in the year in which the loan is received. It may be a good idea to create a repayment plan, one that helps you stay on track to pay back the repayable portion of your loan in time, so you can take advantage of the forgiveness benefit.
You can take advantage of the forgiveness benefit as soon as your CEBA loan is eligible for repayment:
Loans approved before September 26, 2020 are eligible for repayment starting October 1, 2020.
If your loan application was approved on or after September 26, 2020 and before December 4 2020, you can start principal repayments any time after January 1, 2021.
If your loan application was approved, or increased by $20,000 to $60,000, on or after December 4, 2020, you can begin or resume making principal repayments any time after April 1, 2021.
Online services offered by the banks and other financial institutions have made it easier to apply for some of these services, as well as the links in our news sections help you directly gain access to the Government application guidelines.