CEBA Loans



Helping businesses through financial uncertainty
 
What is the Canada Emergency Business Account?
 
On March 27, 2020 the federal government announced additional measures to support businesses and not-for-profits. VPCU has been consulting with the government on these measures, designing them specifically to help small and medium sized employers with their most pressing needs and position our economy to recover.

 
The Original Canada Emergency Business Account (CEBA) details are as follows:

  • A $40,000 interest-free (until December 31, 2022), government guaranteed loan to help you pay for operating costs that you’re not able to defer as a result of COVID 19.
  • $10,000 (25%) of the $40,000 loan is eligible for complete forgiveness if $30,000 is repaid on or before December 31, 2022.
  • If the loan is not repaid by December 31, 2022, it will be extended for an additional 3-year term bearing an interest rate of 5% per annum.
  • Loan can be repaid between December 1, 2022 to December 31, 2022.

*UPDATE AS OF MARCH 30, 2021*
The latest version of the Canadian Emergency Business Account (CEBA Version 5) is now active. The deadline to apply for the latest CEBA program is June 30, 2021. ​Members may now submit one of two types of applications to VPCU. Please review below for more details.
 
Type 1: Brand New $60,000 CEBA Loan ApplicationThis is for applicants that have not applied for the original $40,000 CEBA program.
 
Type 2: A Top Up $20,000 CEBA Loan ApplicationThis is for applicants that have an existing loan with VPCU through the original $40,000 CEBA program.
 
What are the general eligibility criteria for CEBA Version 5?
(Updated requirements as of December 24th, 2020)

The CEBA application process follows one of two streams: (i) the Payroll Stream (Applicants with employment income paid in the 2019 calendar year between Cdn.$20,000 and Cdn.$1,500,000) or (ii) the Non-Deferrable Expense Stream (Applicants with Cdn.$20,000 or less in total employment income paid in the 2019 calendar year).
Every applicant must meet the following criteria:
 
  • Has an active CRA Business Number (BN) with an effective date of registration on or prior to March 1, 2020.
  • Has an active business chequing/operating account with the Lender at the time of applying for CEBA. Note: If Borrower currently does not have a business chequing/operating account the Borrower must create one at their primary financial institution before applying for CEBA.
  • Has not previously used the Canada Emergency Business Account Program (the “Program”) and will not apply for support under the Program at any other financial institution.
  • Intends to continue to operate its business or to resume operations.
If you fall into the Payroll Stream and once you have completed the application with your financial institution, the Government of Canada will assess the application and inform your financial institution of the approval or decline of the loan. If approved, your financial institution will provide the funds into your business chequing / operating account.
If you fall into the Non-Deferrable Expenses Stream you must also meet the following criteria:
 
  • Have 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.
  • Filed an income tax return with the CRA with a tax year ending in 2019 or, if its tax return for 2019 has not yet been submitted, 2018.

CEBA applications under the 2020 Eligible Non-Deferrable Expenses Stream will follow a three-step process:

Step 1: Complete the online Pre-Screen Tool by clicking HERE. The Pre-Screen Tool is not a CEBA application and is solely intended to provide a non-binding indication of eligibility to inform your decision of whether to open a business account (if needed) and apply for CEBA at your financial institution. If you are declined at this step you can still apply for CEBA and therefore still need to complete the next two steps as identified.
 
Step 2: Businesses will initiate applications directly at their primary financial institution where they hold their primary business chequing / operating account. The financial institution will then direct applicants to Step 3 of the application process.
 
Step 3: Following the initial application through your financial institution, applicants will be directed to a CEBA website to provide supporting documentation of the 2020 Eligible Non-Deferrable Expenses and to complete the application.
 
The Government of Canada will assess application information submitted via financial institutions together with the supporting documentation and information provided in Step 3. If successful, the Government of Canada will notify your financial institution and provide funding for your CEBA loan.
 
When and How can I apply?
We first recommend our members go through the CEBA Loan pre-screening tool. This will save you time to ensure you do qualify for the CEBA loan prior to submitting an application with your financial institution. Please see the link below.

https://verify-verifier.ceba-cuec.ca/ 

Once you have confirmed your eligibility through the pre-screening tool and to ensure fair and efficient access to all eligible VPCU business members, all applications must be submitted by filling out the correct CEBA loan application form. Please download, complete the required form and email the completed form and other supporting documents (if applicable) to loans@vpcu.com.
 
Type 1: Brand New $60,000 CEBA Loan Application – This is for applicants that have not applied for the original $40,000 CEBA program. Download the form by clicking HERE.
 
Type 2: A Top Up $20,000 CEBA Loan Application – This is for applicants that have an existing loan with VPCU through the original $40,000 CEBA program. Download the form by clicking HERE.
 
Once you've filled out your form please save it to your computer first, then email it to us at loans@vpcu.com. In addition, for those that applying for “Type 1”, please email/mail/fax us two pieces of identification as well. Depending on the business account type, we may need one or two of the business owners or directors to sign off on the CEBA application form and provide the identification requirements. Once we have received these items, we will prepare some documentation for you to sign via our Docusign e-signature service. For more information on our Docusign e-signature services, please click HERE.

Next, please complete the required business tax documentation filing by going to the website link below. You will need your CRA Business Login ID to register accordingly and you will be asked to upload your business tax documents. If you have any questions as to which documents are required to be uploaded, please contact CEBA Program Hotline at 1-888-324-4201. Once the documentation has been uploaded and the registration process has been completed, please email loans@vpcu.com to advise accordingly.

https://application-demande.ceba-cuec.ca/ 

Lastly, please ensure your B.C. Corporate Registry filings are up to date (if applicable). Company accountants are typically tasked with this filing on behalf of the company on an annual basis. The website to file the annual registry filings is listed below:

https://www.bconline.gov.bc.ca/
 
For a full list of CEBA Program specific frequently asked questions, please refer to the CEBA Webpage listed below:

https://ceba-cuec.ca/ 
 

For VPCU specific frequently asked questions, please see below.
 
I have accounts at multiple financial institutions. How do I determine where to apply?
Your business’ primary financial institution is the one where your business does the majority of its day-to-day banking, including employee payroll, supplier payments, and collection of receivables. If VPCU is not where your business conducts its day-to-day banking, please apply through the financial institution that holds your primary Business Operating Account.
  
How long will it take for the funds to show up in my account?
Your application will be reviewed for eligibility and submitted to the Federal Government for funding. Upon approval, you’ll receive a confirmation email from VPCU, and the $20,000 or $60,000 loan will be deposited into your existing VPCU Business Operating Account. The federal government has advised that funding is estimated to occur between 10 to 15 business days after VPCU has verified and submitted all the pertinent documents through the CEBA loan application portal. Please note that there may be additional delays if you have not uploaded the required tax documents to the CEBA document portal. For ease of reference see the link listed below.
https://application-demande.ceba-cuec.ca/  
 
What interest rate will I pay on the loan(s)?
The loan(s) are interest-free during the deferral period. If the loan(s) cannot be repaid by December 31, 2022, they will be converted into a 3-year term loan at an interest rate of 5.00%.
 
When will I start having to repay the loan? *UPDATED AUGUST 12, 2021*
VPCU will now begin accepting early payments against the loan in order to facilitate the loan forgiveness feature of the loan. Please ensure funds have been deposited into your VPCU business account and then email your repayment requests to loans@vpcu.com so we can process accordingly. Once you have paid down the loan excluding the forgiveness amount, we shall contact the CEBA program to request for the loan forgiveness amount and apply that amount against your remaining loan balance. It should be noted that it may take approximately 4 - 6 weeks for us to receive funds for the forgiveness amount.

If you have not taken advantage of the loan forgiveness option prior to January 1, 2023, your first scheduled monthly payment would be due by January 31, 2023.
 
What are the terms of the forgiveness?

If you borrowed $40,000:

Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before December 31, 2022 will result in loan forgiveness of 25 percent (up to $10,000).

Example 1:
Maximum Amount Borrowed: $40,000
Amount Repaid By December 31, 2022: $30,000
Available Forgiveness: $10,000
 
Example 2:
Maximum Amount Borrowed: $40,000
Amount Repaid By December 31, 2022: $25,000
Available Forgiveness: $0
 

If you borrowed more than $40,000 and up to $60,000:

If you received a $40,000 loan and subsequently received the $20,000 expansion, the terms of your forgiveness have changed and are described here.
Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before December 31, 2022 will result in a single tranche of loan forgiveness up to $20,000 based on a blended rate:
 
  • 25 percent on the first $40,000; plus
  • 50 percent on amounts above $40,000 and up to $60,000.

For clarity, the portion of forgiveness based on a rate of 25% and the portion of forgiveness based on a rate of 50% are combined into a single tranche of forgiveness, which is only available if all other amounts outstanding are repaid by December 31, 2022. For example, if $60,000 is borrowed, no forgiveness is available unless $40,000 is repaid.
Note: some financial institutions may record your $40,000 loan and $20,000 expansion as two separate loans. For the purposes of loan forgiveness, borrowings and repayments on both loans will be aggregated.

Example 3:
Maximum Amount Borrowed: $60,000
Amount Repaid By December 31, 2022: $40,000
Available Forgiveness: $20,000 ($40,000 x 25% + $20,000 x 50%)
 
Example 4:
Maximum Amount Borrowed: $60,000
Amount Repaid By December 31, 2022: $35,000
Available Forgiveness: $0
 

If you fully repaid your original $40,000 loan, claimed forgiveness, and thereafter received the $20,000 expansion:

Repaying the outstanding balance of the $20,000 expansion (other than the amount available to be forgiven) on or before December 31, 2022 will result in loan forgiveness of 50 percent (up to $10,000).

Example 5:
Maximum amount Borrowed: $20,000
Amount Repaid By December 31, 2022: $10,000
Available Forgiveness: $10,000
 
Example 6:
Maximum amount Borrowed: $20,000
Amount Repaid By December 31, 2022: $8,000
Available Forgiveness: $0
 
What will my loan payments be?
The loan is interest-free until December 31, 2022. If you choose to extend the loan beyond this date, interest of 5.00% applies during the extension period. We will provide you with more information on interest payments during the extension period once the program is in place. For the purposes of budgeting, please see the approximate payment amounts for the respective loan amounts:
 
  1. A $40,000 loan, at a fixed rate of 5%, and over a 36-month repayment period would result in a monthly loan payment of approximately $1200. 
 
  1. A $60,000 loan, at a fixed rate of 5%, and over a 36-month repayment period would result in a monthly loan payment of approximately $1800. 
 
  1. A $20,000 loan, at a fixed rate of 5%, and over a 36-month repayment period would result in a monthly loan payment of approximately $600. 

 
Additional Financial assistance options


For additional help from British Columbia Business Covid 19 Support Services please visit their official webpage by clicking here!


For information on the B.C. Small Business Recovery Grant please see below: 

https://www2.gov.bc.ca/gov/content/economic-recovery/business-recovery-grant
 

For additional help from the Government of Canada’s COVID-19 Economic Response Plan, please visit their official webpage by clicking here!
 
My business needs more than what is available through the Canada Emergency Business Account. What are my other options?

If your business is experiencing hardship due to COVID-19, you may be eligible to qualify for some additional relief measures. On a case-by-case basis, we will work with our members to find solutions to help address financial hardships caused by COVID-19. To find out more please reach out to your VPCU loans department via email at loans@vpcu.com or phone us at 604 683 2434.