Canadian farmers who operate their business using a personal bank account are now eligible to apply for the Canadian Emergency Business Account (CEBA) program which currently provides $40,000 (soon to be $60,000) in interest free loans. If the loan is repaid prior to December 31, 2022, a total of $10,000 will be forgivable. Once the program expands to a $60,000 loan, the forgivable portion will increase to a maximum of $20,000.
This has been a long process to get eligibility requirements in place that work for family run farms.
The Canadian Emergency Business Account was originally launched on April 9, 2020. CEBA’s intended purpose is to support businesses by providing financing for expenses that cannot be avoided or deferred as these businesses recover from the financial impacts of COVID-19.
When the program initially launched, OFA quickly realized the program as currently constructed would not work for many family farm businesses.
On April 29, OFA wrote to the Department of Finance highlighting two major issues with the program that needed to be addressed.
- The need for $20,000 in payroll.
- The requirement of a business-operating account.
In June, the government released an update of the CEBA program which provided a way for businesses without payroll to qualify if they could provide proof of at least $40,000 in “non-deferrable expenses.” While this was a positive step forward, the list of eligible expenses was too narrow and would continue to exclude many small farm operations. On June 16, OFA wrote a second letter to the Department of Finance suggesting an expanded list of eligible non-deferrable expenses.
Over the summer, the program was amended to allow more expense to be included for eligibility purposes. Despite a commitment to address the eligibility issues for businesses using a personal bank account, having a business operating account before March 20 remained an eligibility requirement.
On October 26, the eligibility requirements for CEBA were amended to allow businesses operating out of a personal bank account to apply for the program provided they open a business operating account.
OFA strongly encourages any members who were previously not eligible to contact their bank and consider reapplying. The extended application deadline is December 31, 2020.
For more information, visit https://ceba-cuec.ca.