Canadian banks in separate announcements announced they will begin accepting online applications to deliver fast access to the Canada Emergency Business Account (CEBA) program for small businesses, medium businesses and non-profit organizations, starting April 9.

Most applications will be accepted via mobile applications or online only. Some banks are taking advantage of the opportunity to migrate customers who are not online banking customers already. While some say they will make staff available to help with the applications, others have pointedly said that relationship managers, account managers, and call centres will be unable to support the application process. The Canadian Bankers Association (CBA)  says customers are encouraged to visit their own bank’s website for information about the application process to receive CEBA funding.

Banks have personal relationships with their small business customers and are working closely with the federal government to ensure clients have the support they need right now,” says CBA president and CEO, Neil Parmenter.

The CEBA is a government-guaranteed loan of $40,000 to help small business owners meet their immediate cash flow needs. The government-backed loan is interest free until December 31, 2022. Principal repayments can be made voluntarily, at any time, without fees or penalties. The government will also forgive $10,000 of the loan if $30,000 is paid back on or before December 31, 2022. If the balance is not repaid by that time, the remaining balance will be converted to a three-year term loan at five per cent annual interest, paid monthly, effective January 1, 2023. The full balance of the loans must be repaid no later than December 31, 2025.

Banks say clients must agree to use the funds to pay for operating costs that cannot be deferred, such as payroll, rent, utilities, insurance and property tax.  Businesses and not-for-profit organizations (NPOs) are eligible for the program if they have an operating company registered in Canada and annual payroll between $50,000 and $1-million. NPOs need to have submitted their T2 Corporate Income Tax Returns for 2019 to be eligible. Similarly, registered charities need to have submitted their T3010 Registered Charity Information Return for the 2019 tax year to be eligible.

In making their announcements, only one bank gave a sense of how long it would take businesses to receive their money. CIBC says upon approval clients will receive a confirmation email, and the $40,000 loan would be deposited into their existing business accounts up to five days from the date of submission.

Other relief efforts

Two other relief efforts highlighted in the announcements include the Concerted Temporary Action Program for Businesses from Investissement Quebec. Only for businesses operating in Quebec, the program gives companies access to a working capital loan of at least $71,500. Export Development Canada’s Business Credit Availability Program (BCAP), meanwhile, is aimed at exporters. The program allows companies in that line of business, to obtain an operating line of credit or cash flow loan of up to $6.25-million.