The Government had rolled out its Canada Emergency Business Account (CEBA) to support small businesses due to pandemic. Since the start of the program there has been a much criticism over the “exclusion” of certain small businesses. One of the key requirements for CEBA is that a business should have T4 of minimum $20,000 for 2019. That excluded a lot of small businesses, entrepreneurs, sole proprietors and other micro businesses who usually pay through dividends.
Due to T4 requirement, and out of desperation for support, a lot of small businesses who did not have previously filed T4 rushed to file T4 information returns for 2019. Late filing of T4 does not come cheap, read here our previous post about late filing of T4s. For businesses in the similar situation, there is a good news.
Government has expanded CEBA program to include the businesses who pay through dividends only.
Note: This post will be updated as soon as the government announces more details. As of May 26, 2020, the banks are still using the old eligibility criteria for CEBA loan.
New CEBA eligibility for Sole proprietors, Entrepreneurs and Dividend-Paying-Only-Corporations
May 19, 2020 Prime Minister has announced that CEBA program is expanded to include more small businesses.
As per new announcement, small businesses who are sole proprietors, pay independent contracts rather than employees, family-owned businesses who pay through dividends only will be now eligible for the CEBA loan. More details are expected soon.
As per new eligibility, the businesses should:
- have filed their 2018 & 2019 income tax returns,
- have a bank account at a participating financial institution
- have a Canada Revenue Agency Business number
- have eligible non-deferrable expenses between $40,000 and $1.5 million (such as rent, utilities, property taxes and insurance etc)
So, if you were not meeting the CEBA requirements you might be eligible now.
We shall be updating this post as soon as more details are announced, please note we do not provide any consultancy on CEBA loans to general public except to our existing clients, if you are needing more information, please contact your financial institution. Otherwise join the discussion at Facebook by clicking the following link. Due to busy tax season please do not send us direct messages. Our phone lines and direct messaging are only for the existing and potential clients.
Maroof HS CPA Professional Corporation provides a comprehensive income tax services to both individuals and businesses. If you are not up-to-date with your tax filings, you can contact us and we can help you with the same. If you are applying for other loans and your lenders have other requirements such as Notice-to-Reader financial statements or business plan we can help you with that too. Contact us today.