Friday June 19, 2020 ~ NATIONAL
by Mary Brooke, editor ~ West Shore Voice News
The government previously announced that the expanded Canada Emergency Business Account (CEBA) program would launch on Friday, June 19. Prime Minister Justin Trudeau delivered that positive news earlier this week (see June 15, 2020 CEBA announcement).
But today there has been a further delay.
Many of the businesses who were missed on the first CEBA rollout (due to parameters that did not suit the setup and operation of many small business) were pleased at changes to the program (driven by political sway of opposition parties in the minority parliament). And then those relieved small businesses — who would now quality — then waited for an updated application process as promised for today.
$40,000 loan is interest-free if repaid in full by December 31, 2022:
CEBA is one of the federal government’s COVID-19 relief programs created to help businesses access loans to cover the costs of keeping their enterprise afloat during the pandemic. The loans are a flat $40,000 of which only $30,000 is repayable interest-free if the balance of the loan is repaid by December 31, 2022.
“Unfortunately, there will be a slight delay in the roll out of the application process for the expanded program, in order to ensure that the program’s IT infrastructure is safe and secure for the businesses it serves,” it is now stated on the federal government’s CEBA webpage.
In the context of economic survival and recovery during COVID-19, the government says: “There is a pressing need for this kind of support and the government is working hard with Canadian financial institutions to launch the expanded CEBA.”
Working through the technical details:
The government indicates the scope of the initiative and the challenges for accomplishing the goal of support: “This program involves the participation of more than 230 financial institutions, and it is critical to ensure that the systems that receive applications and deliver funding are resilient and secure, to ensure a successful program launch.”
“Details on the new launch date will be provided shortly” is the message on the website today.
Fine tuning for small business realities:
This delay of CEBA comes as part of a relaunch of the product. The initial rollout required a payroll of over $20,000 but that missed the mark for many small businesses and professionals who pay themselves in ways other than payroll (e.g. dividends) and who hire consultants instead of having staff on payroll.
A qualifying business must have at least $40,000 in annual expenses.
Most businesses who qualify are applying through the financial institution where they already have a business account, or are doing business using a personal account.
“Work continues around the clock to ensure the program can securely launch across over 230 financial institutions,” Morneau said in his tweet Thursday. “We know how important the program is to small businesses [and] want to launch as quickly as possible.”
Helping businesses in two tracks:
This $55 billion program offers the interest-free loans of up to $40,000 to small businesses and non-profits, to help cover operating costs while their revenues have been temporarily reduced due to the economic impacts of the pandemic.
This program is seeing far more interest than the wage-subsidy program which is designed to keep businesses up and running by underwriting 75% of wages of employees. It is more suited to larger businesses, while CEBA helps out the smaller enterprises.