The Government of Canada launched CEBA to ensure that small businesses have access to the capital they need to see them through the current challenges, and better position them to quickly return to providing services to their communities and creating employment.
This $55 billion program, implemented by eligible financial institutions in cooperation with Export Development Canada (EDC), provides interest-free loans of up to $40,000 to small businesses and not-for-profits.
Repaying the balance of the loan on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).
The expanded Canada Emergency Business Account (CEBA) is now open for applications. This means that more small businesses can access it.
As of June 26, 2020, businesses eligible for CEBA now include owner-operated small businesses that do not have a payroll, sole proprietors receiving business income directly, as well as family-owned corporations remunerating in the form of dividends rather than payroll. Applicants will have to demonstrate having eligible non-deferrable expenses between Cdn.$40,000 and Cdn.$1,500,000 in 2020.
The expanded CEBA is being made available gradually by more than 230 financial institutions across the country, starting with the larger banks. Other participating financial institutions will start offering the program over the coming weeks.
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Ashley Ryan: Hi everyone, we’re on basically this is a behind the scenes conversation with myself and Josh
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Ashley Ryan: Feldman are one of our geniuses here in in Volta and he’s going to explain to me. So this is like an off the cuff behind the scenes conversation.
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Ashley Ryan: I just threw Josh into this because I was reading this new update from the government. And I’m like, what is it talking about Josh, can you break this down.
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Joshua Veldman: Yeah, so the CBOE loan program with essentially a $40,000 loan program that was created in order to give back things right not to give businesses from the through the bank.
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Joshua Veldman: Some liquidity. So some money that they could use to poke them through the covert crisis.
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Ashley Ryan: That’s true. The bank. It’s alone. Exactly. Yeah.
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Joshua Veldman: And when when it first came out, there was a bunch of rules in place. And one of the biggest rules that was in place was that you had to have payroll and initially you had to have payroll of between 50,000
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Ashley Ryan: Right.
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Ashley Ryan: 1 million
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Joshua Veldman: A month ago, the government have stepped back and said, Well, you can have 20,000 in payroll and up to 1 million
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Joshua Veldman: Scott, how are you
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Joshua Veldman: Now, now they changed it again.
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Joshua Veldman: Because obviously, that didn’t fit all of the businesses. There’s a lot of businesses out there. And if you’re watching this, you might be included in that where
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Joshua Veldman: You pay yourself by dividend. You’re quite large business but you’re still paying yourself like all by dividend out of the corporation. So now what they have amended it to say,
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Joshua Veldman: Hey, okay. If you have dividends will let you apply for this. The only thing you need to do have to be eligible for this is non transferable expenses between 40,001.5 million and basically what that means.
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Joshua Veldman: Is that exactly right there. Yep. So if you have $40,000 in things like rent, utilities,
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Joshua Veldman: Subscription like all these costs that you can’t get rid of that you’re having to continue to pay on an ongoing basis month to month and it’s not buried by like your income or anything like that. You just, you can’t defer them.
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Ashley Ryan: On different expenses. Okay, got it. And so you could still potentially get the relief of up to 10 grand right
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Joshua Veldman: That’s exactly it. So now you are eligible for that loan of if you pay it. The if you pay back the balance of the loan. They will forgive 10 10,000 of it or whether
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Ashley Ryan: It’s so great. So if you’re watching this, I hope that was helpful and if you need help with this, we will help you. I’m posting a link here so you can get a consultation and talk to us about this and how we can help you. So stop recording