Purtzki, Johansen + Associates


Christmas in April: Get your $40,000 interest-free loan now!

The Canada Emergency Business Account (“CEBA”) is on the launch pad.

On April 9, 2020, the major banks began accepting CEBA applications. Here is a summary of the rules, now that banks have begun to accept your application.

  1. Up to $40,000 interest-free loan advances by means of a line of credit.
  2. If repaid by December 31, 2022, up to 25% is forgivable (maximum $10,000).
  3. Loans not repaid by December 31, 2022 will be extended for 3 years at 5% interest.
  4. Loan can be repaid at any time without penalty.
  5. Principal repayments are not required until December 31, 2025 when the full amount of the loan is due.

I suggest you submit your application as soon as you can, since the government allocated only $25 billion to this program.

Are you eligible?

  1. The borrower is a Canadian operating business, with a CRA business number, in operation as of March 1, 2020.
  2. The 2019 employment income paid by the business per T4Summary was between $50,000 and $1,000,000.
  3. The funds can only be used by the Borrower to pay non-deferrable operating expenses of the borrower including, without limitation, payroll, rent, utilities, insurance, property tax and regularly scheduled debt service, 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.
  4. The borrower was a client of the financial institution prior to March 1, 2020.
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