CEBA Loan Requirements, Amounts, and Deadlines Have Changed

December 7, 2020 Update

Eligible Canadian businesses that currently operate through a personal or business bank account will be able to apply for CEBA.
All applicants have until December 31, 2020, to apply for the $40,000 initial loan and until March 31, 2021 for the $20,000 expansion loan at your financial institution.

Eligibility Requirements for the initial $40,000 loan

The CEBA application process follows one of two streams: (i) the Payroll Stream (Applicants with employment income paid in the 2019 calendar year between Cdn.$20,000 and Cdn.$1,500,000) or (ii) the Non-Deferrable Expense Stream (Applicants with Cdn.$20,000 or less in total employment income paid in the 2019 calendar year).

Every applicant must meet the following criteria:

Has an active CRA Business Number (BN) with an effective date of registration on or prior to March 1, 2020.
Has an active business chequing/operating account with the Lender at the time of applying for CEBA. Note: If Borrower currently does not have a business chequing/operating account the Borrower must create one at their primary financial institution before applying for CEBA.
Has not previously used the Canada Emergency Business Account Program (the “Program”) and will not apply for support under the Program at any other financial institution.
Intends to continue to operate its business or to resume operations.

If you fall into the Payroll Stream and once you have completed the application with your financial institution, the Government of Canada will assess the application and inform your financial institution of the approval or decline of the loan. If approved, your financial institution will provide the funds into your business chequing / operating account.

If you fall into the Non-Deferrable Expenses Stream you must also meet the following criteria:

Have eligible non-deferrable expenses between Cdn. $40,000 and Cdn. $1,500,000. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses will be subject to verification and audit by the Government of Canada.
Filed an income tax return with the CRA with a tax year ending in 2019 or, if its tax return for 2019 has not yet been submitted, 2018.

CEBA applications under the 2020 Eligible Non-Deferrable Expenses Stream will follow a three-step process:

Step 1: Complete the online Pre-Screen Tool. The Pre-Screen Tool is not a CEBA application and is solely intended to provide a non-binding indication of eligibility to inform your decision of whether to open a business account (if needed) and apply for CEBA at your financial institution. If you are declined at this step you can still apply for CEBA and therefore still need to complete the next two steps as identified.

Step 2: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing /operating account. The financial institution will then direct applicants to Step 3 of the application process.

Step 3: Following the initial application through your financial institution, applicants will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application.

The Government of Canada will assess application information submitted via financial institutions together with the supporting documentation and information provided in Step 3. If successful, the Government of Canada will notify your financial institution and provide funding for your CEBA loan.

Requirements for the additional $20,000 expanded loan

As of December 4, 2020, CEBA loans for eligible businesses will increase from $40,000 to $60,000.

Applicants who have received the $40,000 CEBA loan may apply for the $20,000 expansion, which provides eligible businesses with an additional $20,000 in financing directly at their bank.

All applicants have until March 31, 2021, to apply for $60,000 CEBA loan or the $20,000 expansion.

The main requirement to recieve the additional $20,000 loan is an attestation statement. This means that you would need to attest to:

facing ongoing financial hardship;
having made reasonable attempts to adapt the business to COVID-19 (and reduce expenses);
intention to continue the business; and
using the additional $20,000 for specific purposes (non-deferrable eligible expenses for 2020 or 2021).

The deadline to apply for the $20,000 expansion at your financial institution is March 31, 2021.

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