Farms and other “owner-operated” businesses with little or no payroll may soon be able to get in on a federal program offering zero-interest loans to businesses up against pandemic-related drops in revenue.
Prime Minister Justin Trudeau on Tuesday announced an expansion of eligibility under the Canada Emergency Business Account (CEBA) to also include “sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll.”
The CEBA program, launched April 9 via eligible banks and other lenders, provides interest-free loans of up to $40,000 to small businesses and not-for-profits.
Loans under CEBA are specifically meant to help cover “non-deferrable” operating costs — such as rent, utilities, insurance and/or taxes — during a period where revenues are temporarily reduced “due to the economic impacts of the COVID-19 virus.”
Borrowers who repay the balance of a CEBA loan on or before Dec. 31, 2022 will get up to 25 per cent of the loan forgiven.
Details, such as a launch date for applications under the new criteria, “will follow in the days to come,” the government said Tuesday in a release.
To qualify under the new criteria, applicants with payroll lower than $20,000 need a business operating account at a participating financial institution; a Canada Revenue Agency business number; eligible expenses between $40,000 and $1.5 million; and to have filed a 2018 or 2019 tax return. Expenses are subject to verification and audit.
CEBA, when first launched, applied to businesses with 2019 payroll between $50,000 and $1 million, then was later expanded to a payroll eligibility range of between $20,000 and $1.5 million. So far over 600,000 CEBA loans have been approved, the government said Tuesday.
Federal Agriculture Minister Marie-Claude Bibeau, in a separate statement Tuesday, described the CEBA expansion as “a big deal for farmers across the country.”
The government, she said, had “heard from many farmers that (CEBA) did not work for them, because many did not meet the payroll criteria.”
Federal officials have “consistently said that we are prioritizing speed” in the rollout of such programs, she said, “and we continue to fill the gaps.”
Farmers who don’t meet the expanded CEBA criteria are advised to look into the Regional Relief and Recovery Fund, she added. — Glacier FarmMedia Network