Cash flow assistance now availablePosted on
The Canada Emergency Business Account funds are starting to roll out this week. These funds are meant to help with the cash flow shortages many businesses are experiencing from closures, reduced revenues and other COIVD-19 related business interruption.
How will the funds be paid?
- The funds are in the form of a $40,000 government guaranteed loan.
- The loan is to help eligible businesses pay for operating expenses, payroll and other non-deferrable expenses that are critical to your business continuity.
- The loan will be paid in the form of a revolving line of credit until December 31, 2020 at which time the revolving loan will crystalize into a term loan payable over 5 years maturing 12,31 2025.
- The loan is interest free until January 1, 2023.
- On January 1, 2023 interest accrues on the remaining balance at 5% per annum, payable monthly on the last day of each month.
- If you pay back $30,000 of the loan on or before December 31, 2022 the remaining $10,000 will be forgiven. Debt forgiveness is a taxable transaction.
- If you do not repay 75% of the balance of the term loan, on or before December 31, 2022, based on the value of the loan crystalized on that date, the full loan balance and all accrued and unpaid interest will be due and payable on December 31, 2025.
What makes a business eligible?
- You must have an existing business account at your financial institution prior to March 1, 2020.
- Your business must have been registered and operational before March 1, 2020
- Your payroll expenses must be between $50,000 and $1 million annually. To verify this, you will be asked to provide Box 14 of your 2019 T4 summary so make sure that you have that handy. If you don’t have it close by, please reach out to us and we can forward that information to you.
- If you have multiple businesses, you can apply for a loan for each business that meets the eligibility.
- Sole proprietors are not eligible for this benefit, they are encouraged to apply for the CERB instead.
- Utilizing other deferral benefits from your bank does not make you ineligible for this program.
How can you apply?
- You will apply with your current financial institution. Most banks will have an application that you can access through your online banking. Check your bank’s website often this week as all institutions place to have the program operational before the end of the week
Remember we are always here to help contact us today! https://www.colbysteckly.ca/contact/
The link below will take you to a listing of all the federal benefits currently available to individuals and business. As always please reach out to us, we are here to support you and your business in anyway we can.