Canada Emergency Business Account

At the beginning of COVID-19 the Canadian Government introduced the Canada Emergency Business Account (CEBA). This is a helpful tool for businesses that are short on cash-flow due to the on-going pandemic. 

CEBA is an interest-free loan of up to $40,000 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. 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. 



To qualify for CEBA: 

  • You must be a Canadian business that was already in operation on March 1 2020. 
  • Are registered with the CRA & have filed a 2018 or 2019 tax return 
  • Have $20,000 to $1,500,000 in payroll is 2019 
  • Have an active account with the financial institution, and will not apply for this loan with any other bank. 
  • Intent to continue business operations after taking the loan
  • Agree to take part of post-funding survey’s if requested by the government 

Note, the following do not qualify for CEBA: government organizations or bodies; unions; and religious, fraternal, or charitable organizations. 

If you are sole proprietor or pay yourself through dividends, the government has recently added expanded ways to qualify for this loan. You may now qualify if you have eligible, non-deferrable expenses of $40,000 to $1,500,000. These expenses can include rent, utilities, insurance, or property tax. All other qualification conditions apply, this is just an amendment to the payroll condition.



You must apply for CEBA online through your business’ primary financial institution.You will need your 2019 T4 Summary. This will provide you with your business’s payroll account number and total employment income reported (box 14), both of these are necessary to apply. 

You will need to check with your financial institution to see if they offer the loan. It is important to note, you must have a business bank account to apply.



After you have applied, funding will hit your business’ bank account in 5 business days. 

You can not use funding for whatever you want. You must use it to pay for operating expenses that are not able to be deferred. This includes expenses like rent, payroll, or utilities. You may not use the loan to increase management salaries, pay the shareholder dividends, or refinance other existing debts. 



The above is a general guideline to CEBA, if you would like to learn more you can check out the government website here, or ask your bank for more details.