[COVID-19] Construction business owners can receive up to $10,000 grant from Canada Business Emergency Account

After the provincial health officer, Dr. Bonnie Henry issued the order under the Public Health Act to prohibit the gathering of more than 50 people. Even though this does not apply to construction sites, and we have a set of guidelines to follow in the construction sites to ensure the safety of workers, the construction industry may soon fall short of work. 

Different levels of government are announcing new benefits almost every week to help workers and business owners to get through this tough time. Today we are here to talk about the recently released Canada Business Emergency Account.


What is Canada Business Emergency Account

The reason why we are so excited to talk about the Canada Business Emergency Account (CBEA) is that it lends business owner emergency funds with the potential of keeping $10,000 as a grant. The entire process does not incur an additional fee to the borrower, and the principal payments can be paid back without penalty. This is a federal level program that is administered by Export Development Canada (EDC) with the help of other financial institutions acting as agents.

The CBEA provides business with a $40,000 emergency loan with 0.00% interest, and no monthly payment until December 31, 2022. There are no fees applied for this program. The best part of it is if 75% of the borrowed amount is paid back before December 31, 2022 then business owner gets to keep the remaining 25%. This is huge.

We do have to mention the catch. The loan must be paid in full by December 31, 2025, and during the period of December 31, 2020 and Dec 31, 2025 the loan is converted to interest-only.


In Summary

  • 0.00% interest with no monthly payments until Dec 31, 2022.
  • No fees apply to the customer under this program.
  • If 75% of the outstanding balance is fully paid on or before Dec 31, 2022 (i.e. borrow $40K loan and pays back $30K), the remaining $10K is forgiven.
  • If not paid in full by Dec 31, 2022, the loan is converted to interest-only at 5.00% until Dec. 31, 2025.
  • Loan must be paid in full by Dec 31, 2025.
  • Principal payments can be made at any time without penalty.
  • Note that $40,000 is the only amount available under this program.
  • This loan program is backstopped by EDC. Financial institutions are acting as agents for EDC to operate the program on the federal government’s behalf.


How to be eligible

The eligibility criteria are very simple. A company has to be operating before March 1st, 2020, and the payroll expense in 2019 calendar year has to be between $50,000 and $1,000,000. Each business can only apply to this program once.

If approved, companies must use the funds from this loan to pay for operating costs that cannot be deferred. This includes overhead cost like rents, utilities, property tax, and employee payroll.


How to apply

Business owners who want to apply for the Canada Business Emergency Account should contact their primary financial institution. Employers would be asked to prove employment income, and be able to demonstrate it by presenting a 2019 T4SUM Summary of Remuneration Paid when requested.


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