Written by In response to the COVID-19 pandemic, the Canadian government offered CEBA loans to businesses to help them survive during this uncertain period. The Canada Emergency Business Account is an interest-free loan program that has approved a countless number of businesses for funding and has loaned them $40K to help them navigate through these difficult times.
While this program was designed to help, it was not enough because of the severe economic impact of COVID-19, and many businesses continued to suffer despite having received this loan. As a result, the federal government raised the maximum loan amount to $60K, so those businesses who originally received the $40K loan through this program can now apply to receive the additional $20K. If your business paid back the original loan, you might still be eligible for the additional amount, and if you have not applied to this program but feel that you need it, businesses have until the end of June 2021 to submit their application.
Not everyone is eligible for this program, so it is best to speak with an accountant or a financial institution to see whether or not you meet the requirements.
Your business needs to meet certain criteria in order for your application to be approved, and you need to prove that your business is suffering as a direct result of the COVID-19 pandemic.
You need to attest to this fact, show that the business is facing financial hardship, and must have an active business chequing or operating account with your CEBA lender at the time of your application.
You also need an active CRA business number prior to March 1st, 2020, as this is when the pandemic hit. Additionally, you need to show that you intend to resume operations once the pandemic is over and prove that your intentions are to continue to run your business.
There are two ways to qualify for the CEBA loan.
#1: Payroll stream
The business must have payroll in the 2019 calendar year between $20,000 and $1,500,000.
#2: Non-deferrable expenses
The business must have eligible non-deferrable expenses between $40,000 and $1,500,000.
Certain eligible expenses include employee wages, rent/lease payments for real estate, equipment used specifically for business purposes and payments incurred for insurance costs or property taxes. Utility payments like gas, telephones, electricity and internet are also considered eligible non-deferrable expenses as long as they were purchased for the business and not for personal use. Payments incurred from independent contractors and fees that are required to maintain licenses or permissions to continue to conduct business are also eligible, as are payments for regularly scheduled debt service.
If you are unsure of your eligibility, there is a screening tool you can use online, so this is a great place to start your application. Discussing this matter with a chartered professional accountant will also help your business, and the experts at Oasis LLP will provide you with all the right information.
Whether you need bookkeeping services or a corporate tax accountant, we do it all, so if you are searching for reputable accountants in the Markham, Vaughan or Richmond Hill areas, contact us today!
