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Canada Emergency Business Account Loan

Last updated: Jan. 14, 2022 

The Canada Emergency Business Account, now closed for applications, provided interest-free loans of up to $60,000 to small businesses and non-profits.

  • NEW: The repayment deadline for CEBA loans to qualify for partial loan forgiveness has been extended a year – from December 31, 2022 to December 31, 2023 – for all eligible borrowers in good standing.
  • Repayment on or before the new December 31, 2023 deadline will result in loan forgiveness of up to a third of the loans value:
    • If you received a CEBA Loan of $60,000 and you reduce your balance to $20,000 by December 31, 2023, the remaining balance of $20,000 is forgivable.
    • If you received a CEBA Loan of $40,000 and you reduce your balance to $10,000 by December 31, 2023, the remaining balance of $10,000 is forgivable.
    • If you received a CEBA Expansion Loan of $20,000 and you reduce your balance to $10,000 by December 31, 2023, the remaining balance of $10,000 is forgivable.
  • Outstanding loans will convert to two-year term loans with interest of 5 per cent per annum beginning January 1, 2024, with the loans fully due by December 31, 2025.
  • All CEBA applicants can check the status of their CEBA Loan online.
  • Payments can be made online through your financial institution.
  • The forgivable portion of the loan is taxable in the year the loan was taken. 

The loan can be used to cover operating costs such as payroll, rent, utilities, insurance, property tax and regularly scheduled debt service.

The loan can’t be used for payments or expenses such as the repayment/refinancing of existing debt, payments of dividends, distributions and increases in management compensation.

The loan is interest-free. There is no cost to the borrower, plus there is a direct benefit (up to $20,000) by meeting the repayment deadline.

Applications for CEBA have now closed.

What were the qualifications for CEBA?

Your business had to meet the following requirements:

  • Be a Canadian operating business as of March 1, 2020
  • Have a federal tax registration
  • Demonstrate you had payroll expenses between $20,000 to $1.5 million in the 2019 calendar year
  • Apply through your primary financial institution and have an active business chequing/operating account with them
    • NOTE: If you are currently operating your business with a personal account, you must first open a business account with your financial institution before you apply for the loan. Check with your financial institution for their terms and conditions.
  • Have not applied for the loan through any other financial institution
  • Acknowledge your intentions to continue to operate your business or resume operations
  • Agree to participate in post-funding surveys conducted by the Government of Canada or any of its agents

New expanded criteria for businesses

As of June 26, 2020 the government also expanded the program to include 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
  • To have filed a 2018 or 2019 tax return
  • To have eligible non-deferrable expenses in 2020 between $40,000 and $1.5 million

What are eligible non-deferrable expenses?

The eligible non-deferrable expense categories are the following:
  • Wages and other employment expenses to independent (arm’s length) third parties
  • Rent or lease payments for real estate used for business purposes
  • Rent or lease payments for capital equipment used for business purposes
  • Payments incurred for insurance related costs
  • Payments incurred for property taxes
  • Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet
  • Payments for regularly scheduled debt service
  • Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct business by the Borrower
  • Payments incurred for materials consumed to produce a product ordinarily offered for sale by the Borrower

Contact FBC

Have questions about this or other COVID-19 programs for Canadian businesses? Unlimited consultation related to tax matters is a key benefit of FBC Membership. We’re offering a free consult where we get to know your business and determine next steps on saving you time and money. Click here to request a consultation online.


Disclaimer: The material above is provided for educational and informational purposes only.