As we’ve stated in our previous blogs and newsletters, the Canada Emergency Business Account (CEBA) is an interest-free, partially forgivable loan program started to help businesses as a response to the Covid-19 pandemic. As of December 2020, the program provided funding to more than 700,000 businesses but this proved insufficient to mitigate the economic impact of the pandemic.

As a result, the maximum amount of the loan has been raised from $40,000 to $60,000. What’s even better is that businesses who already received the $40,000 loan can reapply to receive the additional $20,000 loan.

If you’ve paid back the initial $40,000 loan, you can still apply for the additional $20,000 loan. Keep in mind that you must apply for the full $20,000 amount. If you haven’t applied for CEBA yet, you have until March 31, 2021 to submit your application.


Not-for-profits and businesses can apply for the loan and can get an interest-free loan of up to $60,000. Up to 33% (a maximum of $20,000) of this loan is forgivable if it is paid back on or before December 31, 2022.

CEBA is being administered by Export Development Canada (EDC) which is working with financial institutions across the country to provide the loans to their banking customers.

If you haven’t applied for CEBA, then you need to get in touch with your financial institution and see what criteria you need to meet. If you have already received funding through CEBA, then you can reapply for the $20,000 loan by working with your original institution.

Eligibility Criteria

If you haven’t applied for CEBA yet then you’ll need to meet the following criteria in order to be eligible.

  1. You’ll have to attest that your business is facing financial hardship as a result of Covid-19 pandemic. This can be a drop in revenue, an increase in expenses etc.
  2. You’ll need to have an active CRA Business Number (BN) on or before March 1, 2020.
  3. You’ll also need to have an active business account with your CEBA financial institution at the time of application.
  4. You should not have previously received funding via CEBA and will not apply for CEBA through a different financial institution.
  5. You intend to continue to operate your business or to resume operations.
  6. You must attest that the loan will only be used to pay for Eligible Non-Deferrable expenses.

Eligible Non-Deferrable Expenses

Eligible Non-Deferrable Expenses are those expenses that were not incurred or agreed upon before March 2020 and cannot be deferred beyond 2020.

These expenses include.

  • Employee wages and other employment expenses given they are not arms length employees.
  • Insurance and property tax payments.
  • Rent/lease payments for space and equipment used for the business.
  • Utility payments for the business including telephones, gas, oil, electricity, water, and internet.
  • Payments for regularly scheduled debt service.
  • Payments for materials used to produce a product ordinarily offered for sale by the business.
  • Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations, or permissions necessary to conduct the business.
  • Any other expense in a category other than the above as may be indicated by the government on their Web Page from time to time as being an Eligible Non-Deferrable Expense for the purpose of the CEBA program.

Pre-Screening Tool

If you haven’t yet applied for CEBA, you can start by using this pre-screening tool, provided by the CRA, and find out if you are eligible to apply.

For any questions or queries, contact the team at Syed A.Raza Professional Corporation and get a free consultation.