Federal government expands eligibility criteria for small business loan program and introduces rent assistance program
Prime Minister Justin Trudeau expanded the eligibility criteria for the Canada Emergency Business Account by $ 25 billion (CEBA), a federal program to support small businesses struggling with cash flow during the COVID-19 pandemic.
“When we hear that the program is not reaching as many people as it should, we make changes.”
The main change to the CEBA, announced Thursday morning, is an expanded threshold for the total payroll of an eligible business in 2019. $ 1 million to $ 1.5 million.
As part of the program, the federal government will now support interest-free loans of up to $ 40,000 for businesses with annual payrolls between $ 20,000 and $ 1.5 million. Up to $ 10,000 of each loan will be repayable if the remainder is repaid before December 31, 2022. CEBA loans are intended for payroll, rent, utilities, insurance, property tax, service to debt or other business expenses.
Trudeau said that since the program was announced in March, Small Business and Export Promotion Minister Mary Ng has heard companies say they could use the aid, but which do not meet the criteria for current eligibility.
“When we hear that the program is not reaching as many people as it should, we are making changes,” the Prime Minister said.
“This is money that entrepreneurs and employers can use to cover operational costs and meet other immediate needs,” he added.
Business owners can apply for CEBA support through their banks and credit unions. Trudeau said more than 195,000 loans have been approved, representing $ 7.5 billion in support.
In an emergency parliamentary hearing over the weekend, the Liberals pledged to expand eligibility for the program after small and medium-sized businesses with payrolls slightly above or below the required threshold said that ‘they would not be eligible for the program.
The government has specifically said it will implement additional measures that are partially repayable and remain focused on sustaining jobs and reducing fixed-cost debt while maintaining access to cash through loans to small businesses.
The program is in addition to the federal government’s Canada Emergency Wage Subsidy (CUS) and Canada Emergency Benefit (CEP). The SSUC offers a 75 percent wage subsidy to eligible employers for up to 12 weeks and has been signed in law April 11. CERB provides income support. CERB is offering $ 500 per week for up to 16 weeks to people who have been made redundant due to the COVID-19 crisis.
Trudeau also announced Thursday that there would also be an emergency commercial rent assistance program to help businesses pay their rent in April, May and June. In a press release, the government said the program will seek to provide loans, including forgivable loans, to owners of commercial buildings who reduce or forgo small business rents.
The Prime Minister said Canada’s emergency assistance program for commercial rent will require cooperation between the federal government and Canada’s provinces and territories, and more details will be announced soon.
Image source Wikimedia Commons.