Government expands Canada Emergency Business Account (“CEBA”)
On December 4, 2020, the Government announced that businesses that are continuing to face financial hardship as a result of COVID-19 are able to apply for the second CEBA loan of up to $20,000 – on top of the initial $40,000 that was available to small businesses earlier in the year.
Half of the additional financing, up to $10k, will be forgivable if the loan is repaid by December 31, 2022.
The expansion increases CEBA loans from the existing $40,000 to $60,000 for eligible businesses, of which a total of $20,000 will be forgiven if the balance of the loan is repaid on time.
The CEBA website published additional frequently asked questions, key items are summarized below:
- If you have already repaid your original CEBA loan, you can still apply for the $20,000 expansion.
- Once your financial institution begins to offer the $60,000 loan, you may no longer apply for the $40,000 loan. If applying for the expansion, you cannot apply for less than $20,000.
- You must apply for the $20,000 expansion through the financial institution that provided you the original CEBA loan.
- You will need to submit a new application for the $20,000 expansion.
- All applicants have until March 31, 2021, to apply for $60,000 CEBA loan or the $20,000 expansion.
- The terms and conditions of the loan are as follows:
|Terms||If repaid on or before December 31, 2022||If outstanding after December 31, 2022|
|Interest rate||0% per annum||5% per annum|
|Repayments||No principal payment required||Interest only until maturity|
|Maturity date||December 31, 2022||December 31, 2025|
|Maximum debt forgiveness||$20,000||$0|