Is your business having difficulty covering expenses during the pandemic? You may qualify for the Canadian Emergency Business Account (CEBA). Here is CEBA explained, as well as information on who is eligible and how to apply.

CEBA (the Canada Emergency Business Account) is a government loan program designed to help small and medium-sized Canadian-based businesses cope with the current pandemic. CEBA accomplishes this by providing loans and a specific application process to said businesses to cover their expenses during mandatory shutdowns.

What is CEBA and what are the benefits?

CEBA has been rolled out by the Canadian government on April 9, 2020 to assist small businesses during the COVID-19 pandemic. It is a federal loan program with several benefits.

This $25-billion fund was opened on April 9 and small to medium-sized businesses can get a loan of $40,000 to cover financial obligations that could not otherwise be met due to the loss of income from the current shutdowns. These loans are backed by the government.

A CEBA loan has no interest attached until December 31, 2022. Any business who takes out a CEBA loan is eligible to have 25% of the loan forgiven if the entire amount is repaid by December 31, 2022, an amount that equals $10,000. For businesses unable to repay the entire amount by that date, the loan will then gain a three-year repayment term with a 5% interest rate.

Who is eligible for CEBA?

A business must first be based in Canada to qualify, and it must have federal tax registration that can be verified by the Canada Revenue Agency via a T4 summary of renumeration paid, or a T4SUM. In addition, a business must have had a payroll between $20,000 and $1,500,000 during 2019 to qualify.

Businesses must not be religious organizations, charitable organizations, unions, or government owned. They must also not be owned by an elected official to be eligible. A business must also have no outstanding payments for any existing loans by March 1, 2020, and must not be sole proprietors operating their business using a personal checking account.


On May 19, it was announced that the program will now be available to a greater number of businesses that are sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.

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

  • a business operating account at a participating financial institution.
  • a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
  • 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.

The government previously announced that the expanded Canada Emergency Business Account (CEBA) program would launch on Friday, June 19. Unfortunately, there will be a slight delay in the roll out of the application process for the expanded program, in order to ensure that the program’s IT infrastructure is safe and secure for the businesses it serves. The government will release details for a new launch date shortly.

How can a business apply for CEBA?

To apply, a business will first need their T4SUM from the Canada Revenue Agency as well as its CRA business number (A 15-digit code) or an employer’s account number. A business’s bank account information will also be required.

Once this information is together, a business can apply online for a CEBA loan via its financial institution. This institution must be the one handling its main business checking account. Some banks, such as the Bank of Montreal and the Canadian Imperial Bank of Commerce will require applicants to have an online business account already set up to apply.

This article is provided by E&E Ltd. We are professional accountants who are here to assist small businesses with accurate information during the COVID-19 crisis and beyond. If you or your business have any questions, be sure to contact us today.


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