The federal government on Monday announced that the application deadline for the Canada Emergency Business Account will be extended to October 31st, 2020, from August 31st, 2020.
The much-maligned Canada Emergency Commercial Rent Assistance program–intended to provide rent relief to small businesses that have been financially impacted by COVID-19–will not be extended.
As we noted in a previous blog, the Canada Emergency Business Account provides interest-free loans of up to $40,000 to qualifying small- to medium-sized businesses, with as much as 25 per cent forgivable. The loans are intended to help organizations pay for fixed costs such as wages, utilities and rent.
The Canada Emergency Business Account was first extended in May, with eligibility expanded to include small businesses and not-for-profits that could demonstrate payroll expenditures in 2019 of between $20,000 and $1.5 million. The original terms limited applications to those organizations with payroll of between $50,000 and $1 million in 2019.
Now, CEBA applicants must either meet payroll eligibility criteria or be able to demonstrate at least $40,000 in eligible non-deferrable expenses. Applicants with annual payroll of less than $20,000 must have a business account, a Canada Revenue Agency business number, a 2018 or 2019 tax return and “eligible non-deferrable expenses of between $40,000 and $1.5 million, after taking into consideration other federal COVID-related supports.”
Ottawa says it will once again extend program eligibility, this time to organizations “with qualifying payroll or non-deferrable expenses that have so far been unable to apply due to not operating from a business banking account.” Details of the expansion have yet to be announced, but the Department of Finance says more information will be provided in the coming days, along with a new business account opening process to help businesses apply for the program.
In addition, the government is also extending the Business Credit Availability Program to June, 2021. The initiative is designed to provide loans of as much as $6.25 million to help pandemic-impacted SMEs manage their operational cash flow requirements.
If you have questions about CEBA or other government relief programs, please contact a member of our team.
Armando Iannuzzi, Co-Managing Partner