The Canada Emergency Business Account (CEBA) was launched on April 9, 2020 and provides interest-free loans, guaranteed by the Government of Canada, to small businesses and not-for-profits. As of December 4, 2020, CEBA loans increased from $40,000 to $60,000.


If you have already applied for the original $40,000 CEBA loan and are considering applying for the additional $20,000 loan, it is important for you to consider the following information.

CEBA Forgiveness Terms

Both of the loans are combined into one $60,000 loan. This means that you will have to repay $40,000 on or before December 31, 2022 for the remaining $20,000 to be forgiven.

CEBA Eligibility

An amended loan agreement is required for the additional $20,000 in funds. If your original agreement said you could use the funds “without limitation, payroll etc.”, that will be changed to reflect that all funds were used only for non-deferrable eligible expenses.

Eligible non-deferrable expenses are:

  1. Wages and other employment expenses to independent (arm’s length) third parties;
  2. Rent or lease payments for real estate used for business purposes;
  3. Rent or lease payments for capital equipment used for business purposes;
  4. Payments incurred for insurance related costs;
  5. Payments incurred for property taxes;
  6. Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet;
  7. Payments for regularly scheduled debt service;
  8. Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct your business;
  9. Payments incurred for materials consumed to produce a product ordinarily for sale by you; and
  10. Any other expense in a category other than the above, as may be indicated by the Government of Canada on https://application-demande.ceba-cuec.ca/ from time to time.

Additional Certification for CEBA

A business must certify the following:

  • The business is facing ongoing financial hardship as a result of the COVID-19 pandemic;
  • The business intends to continue to operate or resume operations;
  • In response to the COVID-19 pandemic, the business has made all reasonable efforts to reduce its costs or adapt its business to improve its viability; and
  • The business has not used any amount received previously under the CEBA Loan Program to make any payment or pay any expenses other than “Eligible Non-Deferrable Expenses”.

If you have questions regarding whether you should apply for the additional CEBA loan, please contact your McCay Duff advisor.

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