The Canada Emergency Business Account (CEBA) offers relief measures for small Canadian businesses. It is designed to provide additional capital to small businesses to see them through the current economic disruption and uncertainty caused by the COVID-19 pandemic.
Eligibility Criteria for the CEBA
To be eligible, you must have been an existing, active business member of Osoyoos Credit Union on March 1, 2020, who meets all of the criteria for the program set by the Government of Canada, as follows:
- Your business must be a Canadian operating business in operation as of March 1, 2020.
- Your business must have federal tax registration and you need to be able to provide your Canada Revenue Agency Business Number (BN), as reported at the top of the 2019 T4 Summary of Remuneration Paid.
- Your business’s total employment income for 2019 must have been between $20,000 and $1.5 million (CAD). You need to be able to demonstrate this via Box 14 of the 2019 T4SUM and boxes 14 and 71 on all employee T4s for 2019.
- You must agree to use funds to pay for operating costs that cannot be deferred (including payroll, rent, utilities, and insurance). The funds cannot be used to fund any payments or expenses related to reducing existing indebtedness, payment of dividends or increases in compensation to management.
- Your account with us must have been opened prior to March 1, 2020 and must not have been in arrears by 90 days or more as at March 1, 2020.
- You must intend for your business to resume operations or continue operations.
- You must agree to participate in post-funding surveys conducted by the Government of Canada or its agents.
Additionally, you can only apply for the loans at one financial institution. If you hold accounts with more than one financial institution, choose only one. Applying at more than one financial institution may result in legal prosecution by the federal government and you may be required to immediately repay any loans.
If you own multiple businesses:
Each business entity is able to enroll in CEBA, subject to each business individual meeting the eligibility requirements. If you own multiple businesses and each of those meets the criteria for the CEBA Program, you may apply on behalf of each eligible business.
Borrowers excluded from CEBA
Per the requirements set out by the Government of Canada, the following business borrowers are not eligible to receive the CEBA:
- Sole proprietors who use personal accounts for their business (For further information, please visit the Government of Canada’s COVID-19 Economic Response Plan site.);
- Any government organization or body, or an entity owned by a government organization or body;
- Any union, charitable, religious or fraternal organization or entity owned by such an organization or if it is, it is a registered T2 or T3010 corporation that generates a portion of its revenue from the sales of goods or services;
- Any entity owned by individual(s) holding political office; and
- Any entity deemed to promote violence, incite hatred or discriminate on the basis of sex, gender, sexual orientation, race, ethnicity, religion, culture, region, education, age or mental or physical disability.
For any further information about eligibility for the CEBA Program, visit www.CEBAquestions.ca.
How much can I borrow via the CEBA?
The CEBA allows for business loans up to $40,000.
What are the terms for the CEBA?
The loans are interest-free through to December 31, 2022. If any part of the balance is not paid by December 31, 2022, the remaining balance will convert to a 3-year term loan at 5% annual interest to be paid monthly effective January 1, 2023.
No principal repayments are required until December 31, 2022. However, an amount of up to 25% (or $10,000) will be forgiven if the balance of the loan is repaid on or before December 31, 2022.
Given the unpredictability of the COVID-19 pandemic, it may make sense for you to hold on to your CEBA funds as a contingency, especially as the loan is interest-free until December 31, 2022.
More details on the repayment process will be coming soon.
How to participate in the CEBA at OCU
We are working out the final details and waiting on the government to on-board our Credit Union. We’re sure you can appreciate that this process takes time, considering all Canadian financial institutions need to be on-boarded.
That being said, we anticipate being active by May 1st, 2020.
Please get in touch with us to register your interest in the CEBA. Once we have received documentation from the Federal Government, we will contact each of you with the forms, instructions, and information about the CEBA funding.
For more information or to download the application CLICK HERE.
For businesses with more than one owner
The individual applying for and enrolling your organization in CEBA will need to have the authority to sign on behalf of and bind the organization to the terms of the CEBA loan agreement. If your organization currently requires the consent of more than 1 director or officer to bind the organization, the organization is responsible for preparing and approving a resolution that allows the individual applying for the loan to be given this authority prior to submitting the application. We cannot accept multiple signatures.
Additional Support from OCU
It will take some time for your application for the CEBA business loan to be considered and any funding distributed to you.
If you need assistance in the meantime, please do not hesitate to contact us. We’re here to help and we’re working hard on flexible options for all our members during this uncertain time.
Your business may be entitled to multiple relief avenues. The OCU COVID-19 relief measures and the CEBA program are independent of one another so you can apply for both, where you meet the eligibility requirements.
Together we’re better.