Expanded Canada Emergency Business Account (Oct 2020)

Canada Emergency Business Account Expansion

Expanded Canada Emergency Business Account (CEBA)
Last updated: 21 October 2020


CEBA provides interest-free loans of up to $40,000 to small businesses and non-for profits, to help cover their operating costs during a period where their revenues have been temporarily reduced, due to the economic impacts of COVID-19. 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. Interested businesses should contact their primary business financial institution for further information and to apply for the program.

As per the requirements of the program set out by the Government of Canada, the Borrower must agree to use the funds from this loan to pay for operating costs that cannot be deferred such as payroll, rent, utilities, insurance and property tax. They may not be used to fund any payments or expenses such as prepayment/refinancing of existing debts, payments of dividends, or increases in management compensation.

Qualification Criteria

Businesses will be eligible to apply for this loan if they meet the following criteria:

  • The Borrower is a Canadian business in operation as of March 1, 2020, and has a federal tax registration.
  • The Borrower’s total employment income paid in the 2019 calendar year was between $20,000 and $1,500,000. For applicants with $20,000 or less in total employment income paid in the 2019 calendar year:
    • The Borrower has a Canada Revenue Agency (CRA) business number and has filed a 2018 or 2019 tax return
    • The Borrower has eligible non-deferrable expenses between $40,000 and $1,500,000. These expenses could include costs such as rent, property taxes, utilities, and insurance. A full listing of eligible expenses can be found here. Expenses will be subject to verification and audit by the Government of Canada.
  • The Borrower has an active business chequing/operating account with the primary financial institution, which was opened on or prior to March 1, 2020 and was not in arrears on any existing loans, by 90 days or more as at March 1, 2020.
  • The Borrower has not previously used the Program and will not apply for support under the Program at any other financial institution.
  • The Borrower acknowledges its intention to continue to operate its business or to resume operations.

Loan Details

The loan will be funded as a $40,000 term loan to approved businesses, at 0% interest. Repaying $30,000 of the loan on or before December 31, 2022 will result in loan forgiveness of 25% ($10,000). The loan is interest-free until December 31, 2022 and no principal repayments are required during this period, unless the Borrower is seeking to repay 75% of the loan to qualify for the 25% forgiveness. 

If a Borrower cannot repay the loan by December 31, 2022, it can be converted into a 3-year term loan at an interest rate of 5%. The full balance and all accrued interest must be paid no later than December 31, 2025. While no principal repayments are required until December 31, 2025, it is always good practice to make steady payments to match the incoming cash flows from business operations.

Application Process

There are two CEBA application streams:

1. For businesses with total employment income paid to employees in 2019 greater than $20,000 and less than $1,500,000:

  • Please e-mail your request to ceba@sparkcu.ca. Your e-mail must include the following information:
    • Legal business name and "operating as" name, if applicable
    • Signing authority name(s), phone number(s), and e-mail address(es)
  • Upon receipt of your e-mail request you will be contacted by a SPARK Financial Advisor. Please have the following information ready:
    • CRA Business Number (BN 15 characters - 9 digits, 2 alpha, 4 digits)
    • 2019 T4 SUM (Box 14 of 2019 T4 SUM)
  • Once we have all of the required information, we will contact you with the next steps
2. For businesses with total employment income paid to employees in 2019 of $20,000 or less and 2020 eligible non-deferrable expenses greater than $40,000 and less than $1,500,000:
  • Step 1: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing/ operating account. The financial institution will then direct applicants to Step 2 of the application process.
  • Step 2: Following the initial application through your financial institution, applicants will be directed to a CEBA website to provide supporting documentation of the 2020 eligible non-deferrable expenses and to complete the application. A document upload instruction guide is available here. Please have the following information ready:
    • The name of the financial institution where you submitted your application; and
    • Your 9-digit business number (same number you used in your application with your financial institution); and
    • Electronic or paper copies of Receipts / Invoices / Agreements to be uploaded as evidence of your 2020 Eligible Non-Deferrable Expenses.

The Government of Canada will assess application information submitted via financial institutions in Step 1 together with the supporting documentation and information provided in Step 2. If successful, the Government of Canada will notify your financial institution and provide funding for your CEBA loan.