Canada Emergency Business Account Loan

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Canada Emergency Business Account Loan

Last updated August 10, 2020. We will update blog posts when more information is released.

The Canada Emergency Business Account provides interest-free loans of up to $40,000 to small businesses and non-profits.

The loan can be used to cover operating costs such as payroll, rent, utilities, insurance, property tax and regularly scheduled debt service.

The loan can't be used for payments or expenses such as the repayment/refinancing of existing debt, payments of dividends, distributions and increases in management compensation.

If you repay the loan by December 31, 2022, up to $10,000 (25%) could be forgiven. The forgivable portion of the loan is taxable. 

The loan is interest-free. There is no cost to the borrower, plus there is a direct benefit (up to $10,000) by meeting the repayment deadline.

To apply, speak with your lender or financial institution.

How do I qualify?

Your business will need to meet the following requirements:

  • Be a Canadian operating business as of March 1, 2020

  • Have a federal tax registration

  • Demonstrate you had payroll expenses between $20,000 to $1.5 million in the 2019 calendar year

  • Apply to the Canada Emergency Business Account through your primary financial institution and have an active business chequing/operating account with them

  • Have opened the business account on or prior to March 1, 2020

  • Have not applied for the loan through any other financial institution

  • Acknowledge your intentions to continue to operate your business or resume operations

  • Agree to participate in post-funding surveys conducted by the Government of Canada or any of its agents

New expanded criteria for businesses 

As of June 26, the government also expanded the program to include a greater number of businesses that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:

  • A business operating account at a participating financial institution

  • A Canada Revenue Agency business number

  • To have filed a 2018 or 2019 tax return

  • To have eligible non-deferrable expenses in 2020 between $40,000 and $1.5 million

What are eligible non-deferrable expenses?

The eligible non-deferrable expense categories are the following:

  • Wages and other employment expenses to independent (arm’s length) third parties

  • Rent or lease payments for real estate used for business purposes

  • Rent or lease payments for capital equipment used for business purposes

  • Payments incurred for insurance related costs

  • Payments incurred for property taxes

  • Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet

  • Payments for regularly scheduled debt service

  • Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct business by the Borrower

  • Payments incurred for materials consumed to produce a product ordinarily offered for sale by the Borrower

How do I apply?

Each bank is requesting the following information when you apply:

Applying using the Payroll Stream:

  • Your employer account number, as reported at the top of your 2019 T4 Summary of Remuneration Paid (T4SUM)

  • Your employment income reported in Box 14 of your 2019 T4SUM

  • Your 2019 T4SUM if requested in an audit

Applying using the Expenses Stream is a two-step process.  Once you have initiated the application through your financial institution, you will be directed to the CEBA site and be required to supply the following: 

  • The name of the financial institution where you submitted your application; and

  • Your 9-digit business number (same number you used in your application with your financial institution); and

  • Electronic or paper copies of Receipts / Invoices / Agreements to be uploaded as evidence of your 2020 Eligible Non-Deferrable Expenses

Download our Canada Emergency Business Account Loan Checklist for a list of what you'll need to apply and a summary of eligibility requirements (PDF).

The deadline for completing the CEBA application at your primary financial institution is August 31st, 2020.

After completing the application with your financial institution, you must upload supporting documentation by September 3rd, 2020.

Several Canadian financial institutions have announced in more detail how they will be administering the account including:

  • CIBC

  • RBC

  • Scotiabank

  • TD

  • BMO

How do I apply through CIBC?

To access the loan through CIBC, complete an application through CIBC online banking. You will need to provide your business contact information and have good standing as an existing borrower.

If your application is approved, $40,000 will be deposited into your business operating account within 5 business days.

How do I apply through RBC?

RBC is accepting applications through RBC online banking.

They are also offering a financial relief program for businesses impacted by COVID-19. RBC is advising business clients to contact their advisor or call the Advice Centre at 1-800-ROYAL-20.

Options include:

  • Business loan payment deferrals

  • Increases to operating line of credit limits

  • Waiving of credit card minimum payments

  • Waived setup fees for new enrollments to cash management solutions

  • Waived Stop Payments fee

How do I apply through Scotiabank?

Scotiabank is accepting applications through Scotiabank online and mobile banking.

If your business is experiencing financial hardship as a result of COVID-19, they are offering advice and assistance with liquidity and financial covenant relief. This includes temporary lending payment deferrals or other forms of short-term support to customers who meet required qualifications. They recommend reaching out to your small business advisor or branch manager at Scotiabank for details.

How do I apply through TD?

TD is accepting applications through an online portal.

TD is also offering a deferral of business banking principal payments and reviewing new or additional credit requests for businesses financially impacted by COVID-19. If you're a TD customer, get in touch with them to learn more.

They announced they're also working on loan guarantees for small and medium-sized businesses and a co-lending program with Business Development Canada.

How do I apply through BMO?

BMO is accepting applications through an online portal.

They are also offering a financial relief program for their small business customers impacted by COVID-19.

Some of the options include:

  • Payment deferral on small business credit cards and credit line for business

  • Payment deferral on the principal of a small business loan

  • Increases on small business operating lines to help with short-term working capital

If you're a business client of BMO, get in touch with them to learn more.

Contact FBC

FBC has introduced a program to assist both Members and Non-Members to determine their eligibility and handle the paperwork for federal government support programs. Register for a free, 15-minute eligibility assessment with FBC:

FBC Members:

FBC Non-Members:

If you’d like to learn more about this or other COVID-19 programs for Canadian businesses, please call us at 1-800-265-1002 or email [email protected] Unlimited consultation related to tax matters is a key benefit of FBC Membership. You can also book an appointment.

Visit our COVID-19 Resource Centre for the latest information, advice and insights for small business owners. 

Disclaimer: The material above is provided for educational and informational purposes only.

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