Federal government expands criteria for emergency business loans
OTTAWA – The federal government has expanded the Canada Emergency Business Account (CEBA) to allow more businesses to qualify.
The CEBA is offering loans of $ 40,000 through government-backed financial institutions to businesses suffering from the COVID-19 pandemic. The loans are 25% repayable if repaid by 2022, and were previously only available to companies paying between $ 50,000 and $ 1 million in salaries in 2019.
On Thursday, Prime Minister Justin Trudeau announced that companies that spent between $ 20,000 and $ 1.5 million in payroll in 2019 will be eligible to receive a loan through the CEBA.
“It’s money that entrepreneurs and employers can use to cover operational costs and meet other immediate needs,” Trudeau said.
According to the federal government, to date, more than 195,000 loans have been approved, representing more than $ 7.5 billion in credit to small and medium-sized businesses.
Also on Thursday, the federal government announced Canada’s Emergency Commercial Rent Assistance Program for Small Businesses.
At a press conference, Finance Minister Bill Morneau said the program would provide loans, including forgivable loans, to owners of commercial buildings who would then offer small businesses rent cuts for April, May and June.
“To do this, we will need to work in partnership with the provincial and territorial governments that govern the owner / tenant relationships of commercial properties,” said Morneau.
Morneau said there will be more information announced about the rent assistance program in the near future.
In an emailed statement, the Canadian Chamber of Commerce said expanding the emergency account criteria for Canada businesses is a positive step, as was news of the new rent assistance program. for small businesses, but she will continue to advocate for the government to remove the payroll criteria from the program entirely to ensure that any business that needs bridge financing can get help.
“In addition, we remain concerned that the definition of payroll like the one provided via Q4 excludes many entrepreneurs from qualifying. Many small business owners pay themselves in the form of dividends (T5) and only have entrepreneurs as employees. The government should broaden the definition of payroll to capture how different types of businesses calculate it, ”the statement said.
“Many companies that meet the criteria set out in the program are denied funding. We urge the government to work closely with Canada’s financial institutions to ensure that all businesses receive the financing they need.