If you are looking for a small business loan, one option to consider is the CRA CEBa Loan Agreement. The Canada Emergency Business Account Loan can provide eligible small businesses with financial support during the COVID-19 pandemic. Here`s what you need to know about the loan agreement:
Eligibility for the Loan
To be eligible for the loan, your small business must meet the following criteria:
– Be a Canadian operating business in operation as of March 1, 2020
– Have a registered business number
– Have an active business chequing/operating account with the lender, which must have been opened before March 1, 2020, and was not in arrears on existing borrowing facilities, if applicable, with the lender by 90 days or more as of March 1, 2020.
– Have an annual payroll expense of between $20,000 and $1.5 million (based on your 2019 T4SUM Summary of Remuneration Paid statement, or equivalent documentation for businesses with no employees)
Loan Amount and Terms
The CRA CEBa Loan Agreement provides small businesses with up to $60,000 in interest-free loans to help cover their operating costs and expenses, such as rent, utilities, salaries, and other day-to-day expenses. The loan will be interest-free until December 31, 2022. After that date, the unpaid balance will be converted into a three-year term loan at an annual interest rate of 5%.
Small businesses that receive the loan are not required to make any payments on the loan until December 31, 2022. After that date, regular payments of principal and interest will begin, with the loan fully repaid by December 31, 2025. The loan may be repaid in full at any time without penalty.
To apply for the CRA CEBa Loan Agreement, eligible small businesses should contact their financial institution. The loan is available through more than 230 financial institutions across Canada, including banks, credit unions, and cooperatives.
In conclusion, if you are a small business owner in Canada in need of financial support during these challenging times, the CRA CEBa Loan Agreement can provide a much-needed lifeline. Be sure to check your eligibility, loan amount, repayment schedule, and application process with your financial institution and apply as soon as possible.