November 16, 2020
By Nizam Shajani, CPA, CA, MBA
The Canada Emergency Business Account (CERB) will soon increase the loan amount from $40,000 to $60,000. Of the $60,000 total loan, only $40,000 will be repayable.
Details are still pending on when the second portion of this loan application will be available.
Currently, the CEBA will provide interest-free loans in the form of lines of credit of up to $40,000. Businesses that qualify include:
• Businesses with payrolls of between $20,000 and $1.5 million in the 2019 year, or
• Businesses that have eligible non-deferrable expenses of between $40,000 and $1.5 million in 2020.
A business operating account at a participating financial institution was previously required, however as of October 26, 2020, businesses operating through a personal bank account may also apply.
A quarter of this loan (up to $10,000) is eligible for complete forgiveness if the loan is repaid by December 31, 2022. After this date the loan will be converted to a 3-year term loan charging an interest rate of 5%.
The CERB applications opened on April 9th and businesses are able to apply via their financial institution website. It is anticipated the process will be similar when the additional $20,000 loan is made available.
Deadline to apply is December 31, 2020
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