Emergency Business Account

An interest-free $60,000 line of credit, and a partially forgivable loan

Most small businesses are experiencing uncertainty about their cash flow due to COVID-19, and paying the bills feels harder than ever right now.


But the Canada Emergency Business Account can provide a cash injection for your company and help you manage your expenses until the crisis is over.


What is the Canada Emergency Business Account (CEBA)?

CEBA is a $60,000 government‑guaranteed loan provided through major banks to help small businesses effected by the COVID-19 crisis pay for operating expenses and payroll while cash flow is uncertain.

Your bank has received funding from the Federal Government and can provide your business with a $60,000 revolving line of credit until December 31, 2020.

After December 31, 2022, any outstanding balance on the $60,000 line of credit will be converted into a five‑year term loan.

Your bank will not charge you interest on the line of credit or term loan until January 1, 2023.

After January 1, 2023, annual interest of 5% will be calculated on the balance of the term loan and will be payable on the last day of each month.

Now this is important...

If you pay off $40,000 of the balance of the term loan (the balance on January 1, 2021) by December 31, 2022, the remaining $20,000 balance of your term loan will be forgiven.

For example, if your loan balance was $60,000 on January 1, 2021 and you repaid $40,000 before December 31, 2022, the remaining $20,000 of the loan would be forgiven.

If you didn’t repay $20,000 of the balance of the term loan (the balance on January 1, 2021) before December 31, 2022, the full loan balance and all unpaid interest would be due on December 31, 2025.

You can apply for CEBA for each small business that you own as long as each business meets the eligibility criteria provided below.


Are you eligible for the Canada Emergency Business Account?

When the program was originally announced on April 9, 2020 to be eligible small businesses needed to meet all of the following criteria:

  1. Your business was registered and operating by March 1, 2020;
  2. Your business had annual payroll between $20,000 and $1.5 million in 2019, based on your 2019 T4 Summary of Remuneration Paid filed by February 2020; and
  3. You must agree to use the funds from this loan to pay for operating costs for your small business, like payroll, rent, utilities, insurance, debt payments and property taxes.
On May 19, 2020 to program was expanded to include businesses
  1. who are sole owner-operators;
  2. that depend on contractors rather than employees; and
  3. that are family businesses that pay employees by dividends rather than payroll.

The CEBA program has also been modified to include new businesses (those which have never filed a tax return) and businesses which do not have a “business account” at a bank and operate through personal bank accounts.

To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 need:

  1. a business operating account at a participating financial institution;
  2. a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return; and
  3. eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities and insurance. 


When can you apply for the Canada Emergency Business Account?

Major banks are accepting enrollments now for the CEBA program under the criteria that was announced on April 9, 2020.

Applications under the new criteria announced on May 19, 2020 are also now available.

On December 4, 2020, several financial institutions opened their portals to allow applications for the additional $20,000 CEBA loan.

Contact your bank to begin the application process.


How do I apply for the Canada Emergency Business Account?

Your bank will provide you with an enrollment process

Applications through major banks will take place through your online banking.

Once your loan application is processed, funds will be deposited directly into your business bank account.



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