Applications for the expanded federal Canada Emergency Business Account (CEBA) loan program have been opened and are now available from major banks in Canada. Canadian Finance Minister Bill Morneau announced the new via Twitter late last night.
The enlarged CEBA “is being made available gradually”, starting with the big banks.
Companies that were initially excluded by the CEBA are eligible for the expanded program according to its new criteria. Under the revised CEBA conditions, sole proprietors, farmers and businesses that hire entrepreneurs or pay themselves in the form of dividends rather than wages are now eligible.
Applications for the expanded program were initially expected to be available last Friday, but were delayed to ensure CEBA “can get started properly,” Canada says The Finance Department.
“The expanded CEBA will be available tomorrow at major Canadian banks,” Morneau wrote in a Tweeter. “More lenders, such as credit unions, will be offering this product in the very near future. We know many small businesses are waiting patiently in these difficult times – help is on the way. “
According to the program’s website, the expanded CEBA “is being made available gradually by more than 230 financial institutions across the country, starting with the largest banks.” Small financial institutions will start offering it “over the next few weeks.”
RELATED: Government Expands CEBA Loan Program Criteria From $ 40,000 To Small Businesses
CEBA is a Government of Canada assistance program designed to help businesses access loans to stay afloat during COVID-19. The $ 55 billion program provides federally guaranteed loans of up to $ 40,000 to small businesses and not-for-profit organizations, interest-free in the first year.
Under the program, repayment of the balance of CEBA loans received by December 31, 2022 results in a loan forgiveness of 25% (up to a total of $ 10,000).
Under expanded eligibility requirements, applicants with a payroll of less than $ 20,000 must have a business operating account at a participating financial institution, a Canada Revenue Agency business number and a 2018 or 2019 tax return. They also need qualifying non-carry-forward expenses of between $ 40,000 and $ 1.5 million.
“This solution has been a long time coming and will help a lot of those who pay dividends, pay contractors or rent chairs.”
Companies can apply for the CEBA through their financial institutions. The program is delivered by Export Development Canada, which works with Canadian financial institutions, including banks and credit unions, to provide the loans.
Eligible applicants who have applied and submitted all necessary documents, they “should expect” to receive funding within 10-15 business days.
“Finally,” wrote Dan Kelly, President and CEO of the Canadian Federation of Independent Business (CFIB), in a Tweeter react to Morneau’s announcement. “This solution has been a long time coming and will help a lot of those who pay dividends, pay contractors or rent chairs (like living rooms).”
Kelly sharply criticized the time it took for the federal government to launch the expanded CEBA program, which it announced over a month ago, citing the difficulties faced by small businesses initially excluded. CFIB said it was satisfied with the result, but not satisfied: it wants the program to be further expanded.
“Tens of thousands of new small businesses and those without a business bank account will continue to wait for the next round of improvements,” Kelly added, reiterating CFIB’s intention to continue to press. federal government until all small businesses have access to the CEBA. CFIB also advocates that the CEBA be increased to $ 60,000 and canceled at a rate of 50 percent upon repayment.
RELATED: Availability of $ 40,000 CEBA Expanded Small Business Loans Delayed
Companies that conduct their banking transactions through a personal bank account are not eligible for CEBA. Only businesses with chequing or operating accounts opened on or before March 1, 2020 are eligible for the program.
According to the federal government, more than 669,000 CEBA loans have been approved by financial institutions as of June 15. These loans represent a total of approximately $ 26 billion in credit.
During his press briefing last Friday, Prime Minister Justin Trudeau urged eligible businesses to take advantage of the Canada Emergency Wage Subsidy (CUS). CEWS aims to relieve employers by subsidizing 75 percent of employee wages during the pandemic. So far, the program has experienced a lower level of demand than expected.
As of June 22, 515,420 SSUC requests had been approved, for a total value of approximately $ 15.77 billion. The overall cost of the program has been set at $ 73 billion.
Canada’s technology sector recently requested an expansion of the SSUC program. According to a recent survey of hundreds of Canadian technology leaders, 72% of respondents are still not eligible for the program.
Image source Matthew Henry via Burst