No one can deny the hassles and troubles businesses had to face during COVID-19 pandemic. The businesses all over the world were affected and suffered huge financial losses. In order to help these businesses survive, the government of Canada introduced, Canada Emergency Business Account Loan. This is a financial relief measure that is interest free and some portion of it can be forgiven by the government.
The initial loan amount was $40,000 which was later increased to $60,000. AS this was a COVID-19 relief program, the application date ended on 30 June 2021.
Timeline of CEBA program
The program started on 9 April 2020 and was updated several times to meet the changing needs of the businesses in the country. Non-deferred expenses stream was introduced so that more businesses could easily avail the financial aid. The repayment terms were also set and the businesses had to pay back the loan by 31 Dec 2022. Later it was extended to 31 Dec 2023. The companies were expected to pay back the monthly interest rates till this date and the remaining loan amount can be paid back by 31 Dec 2025.
A loan forgiveness program was also introduced. As per this program, the businesses could enjoy 33% loan forgiveness if they pay back the loan by 31 Dec 2023.
CEBA Loan Eligibility Requirements
The government has set certain eligibility criteria for the businesses to qualify for this emergency business loan. All the criteria have been designed such that maximum businesses can access the loan program and avail the benefits. The criteria has been specifically based on the income levels (annual) and Non-Deferrable expenses.
Payroll criteria
This stream is specifically introduced for small businesses that mostly rely on employment expenses that range between $20,000 to 1 million in 2019. The CEBA loan launch on 9 April 2019 helped these businesses in getting the needed financial support in hard times. This criteria is designed to help businesses with payroll costs so that they can manage their workforce in challenging situations and run the business smoothly.
Requirements for Non-Deferrable expense Stream
This stream is designed for those businesses that have non-deferrable expense budget ranging from $40,000 to $1.5 million in 2019. These criteria would help more companies in enjoying the financial benefits under the scheme.
Application and necessary documents
The businesses are required to make prior arrangements for all the documents required for CEBA Loan approval. To make sure things go well in the first attempt, they should work closely with their primary financial institution. The institution will let them know the process and also prepare all documents to ensure approval.
The essential documents that you need to keep handy include T4 summary of the year 2019 and the income tax return form. You also need to make arrangements for the proof of non-deferred costs. With financial institutions by your side, the application process will become quick and easy. The loan amount will quickly be disbursed in your account once the application is approved.
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