The coronavirus (COVID-19) pandemic is affecting the state of banks and companies across Canada. As part of their response, the government launched the Canada Emergency Business Account (CEBA) program, which helps businesses to overcome these challenges.
The CEBA measure is a $55 billion program that aims to provide interest-free loans to small businesses and not-for-profit organizations. These loans of up to $40,000 can help to cover operating costs.
In this post, the Prasad & Company LLP team is doing its part to help businesses by providing more information about the CEBA measure in terms of eligibility, restrictions, and how the firm can aid clients in amending their business goals and long-term strategies.
Both small businesses and not-for-profits that meet certain requirements can apply for the CEBA program.
The borrower must be a Canadian business that has been in operation as of March 1, 2020. In addition to being registered for federal tax, the borrower must have a total employment income between $20,000 and $1.5 million that was paid in the 2019 calendar year.
Individuals who have equal to or less than the minimum amount of $20,000 can also apply for the CEBA program. Requirements involve having a Canada Revenue Agency (CRA) business number, as well as a history of having filed either a 2018 or 2019 tax return.
This type of borrower should also have eligible non-deferrable expenses that are between $40,000 and $1.5 million. This can include expenses such as insurance, property taxes, utilities, and rent. The Government of Canada is the party that will conduct an audit and verification process when it comes to such expenses.
The relationship with one’s financial institution matters in terms of eligibility as well. The individual business owner who wishes to borrow funds must have either an active business chequing or operating account with their lender. This type of account must have been opened either on or before March 1, 2020. The potential borrower should not apply for the program at any other financial institution. This is in addition to having not used the program in the past.
As for intentions, there should be the goal of either continuing business operations or resuming them. The borrower must also be responsible for filling out post-funding surveys issued by the Canadian government.
It should also be noted that certain parties are excluded from the CEBA program. Before starting the application, individuals should consider the following details.
The individual should confirm that they are not a government organization or body, or owned by either of such entities. This is in addition to confirming that they are not owned by any member of Parliament. As well, the borrower must not be or owned by a union, charitable, or fraternal organization.
Furthermore, the borrower cannot incite hatred, promote violence, or partake in discriminiation based on sex, gender identity, gender expression, sexual orientation, race, colour, age, religion, ethnic or national origin, or mental or physical disability.
Prasad & Company LLP prides itself with being able to provide clients with effective business advice. The firm is dedicated to transparency and efficient communication methods to aid clients, employees, and the community as a whole during these unprecedented times.
With staff members who are leaders within the industry, Prasad & Company LLP has been helping businesses achieve goals through various accounting services over the last 35 years. By keeping up with modern technology and using the latest devices and applications, the firm has also provided clients with ease and convenience on a consistent basis.
To receive professional business and accounting advice, contact the Prasad & Company LLP team at 416-226-9840 or 1-888-550-TCAS.