The Expanded Canada Emergency Business Account (CEBA)


Effective June 26, 2020, the expanded Canada Emergency Business Account (CEBA) loan program is now available to businesses with payroll of less than $20,000 in the 2019 calendar year. This is great news for small businesses that did not qualify for this program in the past.

How to qualify for expanded CEBA

Business applicants must demonstrate having eligible non-deferrable expenses between $40,000 and $1,500,000 in 2020. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. It is important to note that these expenses will be subject to verification and audit by the Canadian government.

If the applicant qualifies, the business will receive a $40,000 interest-free loan of which 25% (i.e. $10,000) can be forgiven if the full balance is repaid by December 31, 2022.

The restrictions on use of CEBA funds

The funds from this loan can only be used to pay non-deferrable business operating expenses including but not limited to payroll, rent, utilities, insurance, property tax and regularly scheduled debt service. The funds may not be used for any payments or expenses such as prepayment or refinancing of existing indebtedness, payments of dividends, distributions and increases in the business owner’s compensation.

How to apply

Similar to the current Canada Emergency Business Account (CEBA), eligible businesses must contact their primary financial institution to apply for the expanded program under the Non-Deferrable Expenses Stream and follow a two-step process:

Step 1: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing / operating account.

Step 2: Following the initial application through the financial institution, applicants will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application.

The Canadian government will then assess application information submitted via the financial institutions in Step 1 together with the supporting documentation and information provided in Step 2. If the application is approved, the Canadian government will notify the financial institution and provide funding for the CEBA loan.

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