The Canada Emergency Business Account is a government-guaranteed loan of up to $40,000 that is interest-free until December 31, 2022. The loan is available to help businesses with operating costs during COVID-19. Twenty-five percent of the loan amount ($10,000) is eligible for forgiveness as long as the business pays back $30,000 on or before December 31, 2022. If the business cannot pay back the loan by December 31, 2022, it can be converted into a 3-year term loan at an interest rate of 5%.
Banks may not have the ability to process applications at the branch or through their call centre; this application may only be available online through the banks COVID-19 website.
What you need to know before you apply
Canada Emergency Business Account
- This is a loan to help businesses with operating costs during COVID-19.
- It is a government-guaranteed loan of up to $40,000 that is interest-free until December 31, 2022.
- Twenty-five percent of the loan amount ($10,000) is eligible for forgiveness as long as the business pays back $30,000 on or before December 31, 2022.
- If the business cannot pay back the loan by December 31, 2022, it can be converted into a term loan at an interest rate of 5%.
- Per the requirements of the program, as set out by the Government of Canada, funds from this loan can only be used to pay for operating costs that cannot be deferred, such as payroll, rent, utilities, debt service, insurance, and property tax.
- A business or not-for-profit organization can apply if they have:
- An operating company registered in Canada;
- Annual payroll between $50k and $1MM. This will be based on your 2019 T4SUM; and
- Application for the loan will be through your primary bank. This means that you have a business operating account that was opened on or before March 1, 2020.
- The Eligibility criteria is provided to by the Government and cannot be adjusted by the bank.
- Full criteria can be found on your banks COVID-19 site once available.
Getting ready to apply for the loan
Bookmark your COVID-19 site for when the application becomes available.
To apply, you will need:
- Your 2019 Business T4 Summary of Remuneration Paid Slip.
- Your Business Account number and transit number (This information is available on either of your Bank Statement or one of your Business Account cheques).
Repaying the loan
The Government program payment timelines are as follows:
- The Canada Emergency Business Account will be funded as a revolving line of credit and is interest free until Dec. 31, 2020.
- Any outstanding balance will be converted to a term loan on Jan. 1, 2021 and remains interest free until Dec. 31, 2022.
- If repaid by Dec. 31, 2022, 25% of the balance will be forgiven
- If outstanding on Jan. 1, 2023, 5% interest starts.
- The remaining balance is to be paid in full no later than Dec. 31, 2025.
This information was provided by one of the large banks and may not be accurate as updates are changing daily. Every bank is different so please note that these may not necessarily apply to your banking institution. Contact your primary business banking institution for additional information or more clarification.
For additional assistance please email us at firstname.lastname@example.org or call (587) 316-5070. We are here to help.
Please practice social distancing, stay healthy, stay safe and most importantly stay positive, we will get through all of this together.