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COVID-19 Canada Emergency Business Account Update

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

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. © 2020 Shajani LLP

Nizam Shajani, Partner, LLM, CPA, CA, TEP, MBA

I enjoy formulating plans that help my clients meet their objectives. It's this sense of pride in service that facilitates client success which forms the culture of Shajani CPA.

Shajani Professional Accountants has offices in Calgary, Edmonton and Red Deer, Alberta. We’re here to support you in all of your personal and business tax and other accounting needs.