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Caution Before Applying for CEBA 2.0 ($20,000)

Caution Before Applying for CEBA

A few notes of caution before applying for the $20,000 expansion of the Canada Emergency Business Account (CEBA).

Caution Before Applying for CEBA

Forgiveness Terms Changed

  • Both loans are combined.
  • If the total is up to $40,000, you get 25% forgiveness as long as you pay back the other 75% on-time (i.e., by December 31, 2022).
  • If the total is above $40,000, you only get forgiveness if you pay $30,000 plus 50% of the excess on time. The forgiven amount will be $10,000 plus 50% of the loan in excess of $40,000.
  • If you already repaid the original $40,000 loan, claimed forgiveness, and then borrowed the additional $20,000, you get 50% forgiven once you’ve repaid 50% of the loan.

It Can Change Eligibility Criteria

  • This is true even for the original loan.
  • An amended agreement is required to be signed which certifies that all expenditures since the beginning of the program are “non-deferrable eligible expenses”, even if the first loan agreement you signed was different.

Additional Attestation

  • Requires that COVID-19 has negatively impacted the business.
  • Business must attest that:
    • It is facing an ongoing financial hardship (including, for example, a continued decline in revenue or cash reserves, or an increase in operating costs);
    • It intends to continue to operate; and
    • It has made all reasonable efforts to reduce its costs and to otherwise adapt its business.

Should you have any questions or feedback, please reach out to myself or the team. As always, we are here to help and support you.

Caveat: The information in this publication is current as of the time it was written. This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Deuzeman & Associates to discuss these matters in the context of your particular circumstances. Deuzeman & Associates does not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

 

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