Educational Videos

CEBA – Canada Emergency Benefit Account

The Canada Emergency Benefit Account, or CEBA, is COVID-19 relief measure released by the Canadian government. CEBA allows business owners to obtain a 0% interest loan of up to $40,000, with a chance to have $10,000 of it forgiven.


In this video, Vlad Sherbatov, President and Co-Founder of Smarter Loans, explains how CEBA works, who is eligible for it, and how to apply.


This video was recorded on April 10, 2020, based on information available at that time. We encourage you to visit the Smarter Loans COVID-19 Resource Centre for latest updates and resources available to Canadian residents and business owners.


You can also refer to our answers to the most frequently asked questions about CEBA.


Video Transcript:


Vlad Sherbatov:


The Canadian government has introduced a number of relief measures for small business owners that are heavily impacted by COVID-19. One of these relief measures is called the Canada Emergency Business Account, also known as CEBA. CEBA provides business owners with loans of up to $40,000 at 0% interest and a chance to have $10,000 of it forgiven. In this video I will explain how CEBA works, who is eligible to receive it, and how to apply for it.


Eligible businesses can receive up to $40,000 as a loan to cover urgent operating expenses. For example they can be rent, utilities, insurance or property taxes. There is no interest on the loan until January 1st, 2023. Starting January 1 2023, the loan is converted to a 3 year term loan at 5% annual interest.


There is a forgiveness provision. Up to $10,000 of the loan is eligible for forgiveness. Here’s how the forgiveness provision works. You take your total loan balance at January 1, 2021. Repay 75% of it by December 31st, 2022. The remainder of your loan will be forgiven. If this sounds confusing, let me show you a quick example. If your loan balance at January 1, 2021 is $40,000 and you pay back $30,000 of it by December 31, 2022, then the remaining $10,000 will be forgiven.


In order to qualify for CEBA, a business owner must demonstrate that they spent at least $50,000 in payroll in 2019. You will have to provide your 2019 T4 Summary of Remuneration Paid Statement as proof in order to qualify for CEBA. If you cannot locate this document, contact the Canada Revenue Agency to have it reissued. It is important to note that employers that paid freelancers and contractors in 2019 where T4s are not issued cannot include those wages in the calculation for the $50,000 minimum.


The loan applications are currently accepted online by the major Canadian banks and credit unions. The application process takes place through their online business banking portals. The government of Canada recommends to consult your primary financial institution on how to proceed with their online application. In the cases where there are multiple business owners on a business, only one of them needs to apply, as long as they have the authority to attest and sign the loan agreement on behalf of the business.


Today is April 10th and at the time of this recording, many details are still being revealed about the process of applying and receiving the loan. We will continue to provide updates as more information becomes available, and you can check out the latest updates at We also encourage you to visit the website as the primary source of all government related subsidies and relief measures both for Canadian residents and business owners.

Vlad Sherbatov

Vlad is the President and Co-Founder of Smarter Loans, Canada's original and largest loan comparison website. He is a passionate entrepreneur and business leader in the Canadian financial sector. He was selected as a 2019 Top 25 Leaders in Lending by the Canadian Lenders Association. Vlad is an author at Smarter Loans, and has been featured in publications like the Toronto Star and National Post, among others.