Canada Emergency Business Account
Dear commercial members, if you are still planning on applying for the Canada Emergency Business Account (CEBA), the CEBA application deadline is Aug 31st, 2020. All supporting documentation must also be submitted to the CRA and UCU by Sept 3rd, 2020.
Update to eligibility - updated July 24
The Federal Government has announced its intent to expand the CEBA program so that more small firms will be able to access it. More details regarding the expansion and the timing of implementation are still to come. However, the government did announce that the program will be made available to sole proprietors receiving income directly from their businesses, businesses that rely on contractors, and family-owned corporations that pay employees through dividends rather than payroll. The government is working on solutions for new businesses who have not yet filed a tax return, and businesses operating out of personal bank accounts.
Applying for a CEBA loan
If you qualify, you will need to supply a T4 Summary and sign a loan application agreement. The minimum expected wait to get your funds once your application is submitted is 2-5 days. At the moment, we have to process applications by email with your branch, pending the imminent launch of our online channel.
The CEBA from UCU is an interest free $40,000 loan. 25% of the loan ($10,000) is eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022. If the loan cannot be repaid in full by December 31, 2022, it will be converted into a 3 year term loan charging an interest rate of 5%.
The Canada Emergency Business Account (CEBA) eligibility has been expanded and applications are now being accepted online. Due to additional application information and upload document requirements directly with CRA, processing timeframes may take longer. Thank you for your patience as we continue to ensure the availability of important emergency government benefits to our business members affected by the COVID-19 pandemic.
What are the eligibility requirements for the CEBA?
- The Borrower is a Canadian operating business in operation as of March 1, 2020.
- The Borrower has a federal tax registration.
- The Borrower’s total employment income paid in the 2019 calendar year was between Cdn.$20,000 and Cdn.$1,500,000. For applicants with Cdn.$20,000 or less in total employment income paid in the 2019 calendar year:
- The Borrower has a Canada Revenue Agency business number and has filed a 2018 or 2019 tax return.
- The Borrower has eligible non-deferrable expenses between Cdn.$40,000 and Cdn.$1,500,000. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses will be subject to verification and audit by the Government of Canada.
- The Borrower has an active business chequing/operating account with the Lender, which is its primary financial institution. This account was opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with the Lender by 90 days or more as at March 1, 2020.
- The Borrower has not previously used the Program and will not apply for support under the Program at any other financial institution.The Borrower acknowledges its intention to continue to operate its business or to resume operations.
- The Borrower agrees to participate in post-funding surveys conducted by the Government of Canada or any of its agents.
What are the Eligible Non-Deferrable expense categories?
The Eligible Non-Deferrable Expense categories are the following:
- Wages and other employment expenses to independent (arm’s length) third parties;
- Rent or lease payments for real estate used for business purposes;
- Rent or lease payments for capital equipment used for business purposes;
- Payments incurred for insurance related costs;
- Payments incurred for property taxes;
- Payments incurred for business purposes for telephone and utilities in the form of gas, oil, electricity, water and internet;
- Payments for regularly scheduled debt service;
- Payments incurred under agreements with independent contractors and fees required in order to maintain licenses, authorizations or permissions necessary to conduct business by the Borrower.
Apply for CEBA online at UCU now!
You can now apply for the CEBA loan online through your UCU business account.
This is a very simple process. All you have to do is:
- Log into in your business account.
- Go to Account Services link
- Select the Canada Emergency Business Account (CEBA) Link
After submitting your CEBA Application, please send a copy of all supporting documents to firstname.lastname@example.org and email@example.com. We will forward the Loan Agreement for you to sign
If you are having trouble filling out the form, or if you have any questions, please contact Lesya Babiy, Manager of Business Services firstname.lastname@example.org
A Word of Caution to our Members
UCU will contact you directly -please do not click on or open any emails relating to the CEBA program unless you recognize the sender and are expecting an email from UCU. If you are unsure, please contact us by telephone before you click on any links, or send any confidential information. You can find contact info for your local branch here: Contact Us. We will notify you when your loan proceeds have been deposited to your UCU Business Chequing Account.”
CRA Deposit Enrollement for Businesses
At the moment the CRA Direct Deposit enrollment feature availble in our online banking system is available to individuals.
However, businesses can enroll for CRA Direct Deposit through the CRA website.
Below is some information that can be very helpful in registering your business with CRA and setting up the Direct Deposit:
1. If the you haven't registered your business for CRA page yet, the business owner could do this through the following page: CRA Direct Deposit. Click on the "Business" tab once you land on this page.
Here is a helpful video guide on how to do this: Webinar: How to Register My Business.
2. When you accesses the CRA MyBA page, you can do various tasks to address business needs.The webinar video on different functions available on that page is very beneficial for business owners to watch: Webinar: My Business Account.
3. For Direct Deposit purposes provide the following UCU information:
Routing number: 0828
Transit number: 01972
Account number: input 9 or 11 digit account number held at UCU, that the CRA Direct Deposit goes into.
Answers to frequently asked questions
What businesses and organizations qualify?
Canadian businesses in operation as of March 1, 2020 are eligible for CEBA as long as they:
- have a federal tax registration
- had a total payroll of between $20,000 and $1,500,000 in 2019
- maintain an active business chequing/operating account with the Lender (UCU), which is its primary financial institution, opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with UCU by 90 days or more as at March 1, 2020
- have not previously received CEBA support and will not apply for support under the Program at any other financial institution
- acknowledge an intention to continue to operate your business or to resume operations
- agree to participate in post-funding surveys conducted by the Government of Canada or any of its agents
What businesses and organizations do not qualify
The following entities are not eligible for the CEBA:
- government organizations or bodies, or entities owned by a government organization or body
- union, charitable, religious or fraternal organizations or entities owned by such an organization or if it is, it is a registered T2 or T3010 corporation that generates a portion of its revenue from the sales of goods or services
- entities owned by individual(s) holding political officesole-proprietors
- entities which promote violence, incite hatred or discriminate on the basis of sex, gender, sexual orientation, race, ethnicity, religion, culture, region, education, age or mental or physical disability
What can you use CEBA funds for?
The funds from this loan are only to be used by the Borrower to pay non-deferrable operating expenses of the Borrower including, but not limited to, payroll, rent, utilities, insurance, property taxes and regularly scheduled debt service.
The funds may not be used to fund any payments or expenses such as prepayment/refinancing of existing indebtedness, payments of dividends, distributions and increases in management compensation.
What’s the eligibility criteria for CEBA?
- The person enrolling must have the ability and authority to bind the organization
- The organization is a Canadian operating business in operation on or before March 1, 2020
- The organization has an active business banking account with UCU which is its primary Financial Institution. This business account was opened on or prior to March 1, 2020 and was not in arrears on existing borrowing facilities, if applicable, with UCU by 90 days or more as at March 1, 2020
Can I enroll for CEBA at more than one Financial Institution?
No. Businesses must enroll for the Canada Emergency Business Account at their primary financial institution where they have an existing business banking account and cannot apply at more than one financial institution. Doing so may result in legal prosecution by the federal government.
What happens if there are multiple owners in my business?
Only one person from the organization can agree to the legal documents in the online enrollment process for the Canada Emergency Business Account. The person enrolling your organization must have the legal authority to attest on behalf of the organization and legally bind the organization to the terms of the Canada Emergency Business Account loan agreement. For example, if more than one person is normally required to sign legal documents for your organization, whether under your internal requirements or your agreement with UCU, your organization has to ensure the proper documentation, like a resolution to waive the requirement for multiple signatories for the purpose of enrolling the organization in the Canada Emergency Business Account, it is made to legally permit a designated person to enroll and sign on behalf of the organization. If the other usual signatories for your organization agree, then the designated person can go ahead and enroll.
Can I enroll for less than $40,000?
No. The CEBA from UCU is an interest free $40,000 loan. 25% of the loan ($10,000) is eligible for complete forgiveness if $30,000 is fully repaid on or before December 31, 2022. No principal repayments are required until December 31, 2025 (unless you are seeking to repay 75% to qualify for the 25% forgiveness feature). If the loan cannot be repaid in full by December 31, 2022, it will be converted into a 3 year term loan charging an interest rate of 5%.
What’s the interest on the loan?
No interest applies until January 1, 2023. Commencing on January 1, 2023, interest accrues on the balance of the term loan at the rate of 5% per annum, payable monthly on the last day of each month.
When do I start repaying the loan?
You may start repaying the loan in part or in full at any time without penalty. No principal repayments are required until December 31, 2025. Monthly interest only payments are required on the last day of the month commencing January 2023. The entire loan and all accrued and unpaid interest is due and payable on December 31, 2025.