Canada Expands CEBA Program Providing Loans To Small Businesses
The Canada Emergency Business [Loan] Account (CEBA) program has been extended to October 31 and will soon be expanded to include businesses with personal banking accounts. The CEBA program provides interest-free loans of up to $40,000 to small businesses and nonprofits to help mitigate revenue impacts due to the COVID-19 pandemic.
Repaying the balance of the interest-free loan on or before December 31, 2022 will result in loan forgiveness of 25 percent, up to $10,000. The remaining balance, if any, will become a three-year term loan at an interest rate of five percent.
Funds from the loan can only be used by the borrower to pay non-deferrable operating expenses including payroll, rent, utilities, insurance, property tax and regularly scheduled debt service and agreements with independent contractors, and may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.
Promotional Product Professionals of Canada (PPPC) has provided more information on CEBA here.