CEBA Loan - Feed Qualification
More information has been released by CRA around eligible non-deferrable expenses that may allow your business to now qualify for the Canada Emergency Business Account (CEBA).
In addition to the originally noted categories for non-deferrable expenses, Canada Revenue Agency now includes payments incurred for materials consumed to produce a product ordinarily offered for sale by the borrower. In essence, this means that expenses such as feed and crop inputs costs qualify as eligible non-deferrable expenses. Finished goods’ inventory or purchases of capital assets are not included.
The Non-Deferrable Expenses Stream, for owner-operated small businesses without payroll or with a payroll of less than $20,000, requires an application through the business' financial institution and then a second step to provide documentation to a CEBA website of eligible non-deferrable expenses.
On the CRA document upload site, there are two options for documenting this
- Agreement to pay for materials dated prior to March 1, 2020 and have a contractual end date of no earlier than January 1, 2020; or
- Invoice for livestock feed dated in 2020.
CEBA allows banks and credit unions to provide interest free loans of up to $40,000 for nondeferrable operating expenses. The loans will be guaranteed by the Government of Canada and 25% of the loan amount will be forgivable (up to $10,000) if 75% is repaid before December 31, 2022. If there is a balance on the loan on December 31, 2022, it would be converted to a 3 year term at 5% and there would be no loan forgiveness.
The deadline to apply for CEBA is August 31, 2020.
