CEBA loan criteria change could increase farm eligibility

The federal government is tweaking the eligibility criteria to help more businesses access the $40,000 interest-free Canada Emergency Business Account (CEBA) loan.

Unrolled earlier this spring as part of its COVID-19 relief measures, the government says up to $10,000 of the loan will be forgiven if the rest of the principle is repaid by the end of 2022.

To be eligible, the criteria for all businesses previously included a minimum payroll in 2019 of $20,000 — a requirement that many farms did not meet, particularly where the farmer/owner did not get paid a wage.

For businesses that do not meet the payroll requirement, Prime Minister Justin Trudeau announced on Tuesday that the loan will now also be available to businesses with eligible non-deferrable expenses between $40,000 and $1.5 million. Eligible non-deferrable expenses could include rent, property taxes, utilities, and insurance.

“We heard from many farmers that the Canada Emergency Business Account did not work for them, because many did not meet the payroll criteria,” said Agriculture Minister Marie-Claude Bibeau, in a statement issued late Tuesday. “In dealing with the impacts of COVID-19, our government has consistently said that we are prioritizing speed, and we continue to fill the gaps.”

To qualify under the expanded criteria, applicants with payroll lower than $20,000 would need:

  • a business operating account at a participating financial institution
  • a Canada Revenue Agency business number, and to have filed a 2018 or 2019 tax return.
  • eligible non-deferrable expenses between $40,000 and $1.5 million. (Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance.)

The loan program is offered through financial institutions.

As of May 19, the government says over 600,000 businesses have accessed the CEBA program.

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