This Corona Virus pandemic has devastated the world economy and has caused enormous hardship on many fronts — for individuals and businesses.
Throughout the pandemic, many governments around the world are providing support to their citizens and businesses to weather the storm caused by this virus.
The Government of Canada is playing it’s role and has continued to focus on ways to keep Canadians safe and healthy and to help families pay their bills. Consequently, the government have introduced several measures to protect middle class jobs and support businesses. One of these measures is the introduction of the Canada Emergency Business Account (CEBA).
Based on these eligibility criteria, many small businesses did not benefit from this program as they were left out.
In response to this, the Prime Minister, Justin Trudeau, on May 19 announced an expansion to the eligibility criteria for CEBA to include many owner-operated small businesses.
The changes to the CEBA will allow more Canadian small businesses to access interest free loans that will help cover operating costs during a period when revenues have been reduced, due to the pandemic.
The program will now be available to a greater number of businesses that are 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.
To qualify under the expanded eligibility criteria, applicants with payroll lower than $20,000 would need:
The government noted that these expenses will be subject to verification and audit by the Government of Canada. Funding will be delivered in partnership with financial institutions. More details, including the launch date for applications under the new criteria, will follow in the days to come.
“Our government has been taking action since the start of this crisis to support the small businesses that define our Main Streets and provide jobs that Canadians rely on. We have been listening to you throughout this, and will continue to, to make sure we’re delivering the support Canadian businesses need to get through this tough time and be well positioned for success once the recovery begins.” — The Hon. Bill Morneau, Minister of Finance
The government also noted that they will continue to work on potential solutions to help business owners and entrepreneurs who operate through their personal bank account, as opposed to a business account, or have yet to file a tax return, such as newly created businesses.
So we expect to see further expansion of this program that will benefit many sole proprietors we work with.
You buy a business to get access to its customer list. Facebook paid a lot of money to acquire Instagram, not because they couldn’t develop the technology, but because they wanted access to the millions of subscribers on the platform. You should have the same mindset when buying a business.
Obviously, the government loves businesses, and small businesses for that matter. Small businesses are the engine of the Canadian economy. And this is true for most economies around the world. Essentially, the government is paying you to keep your business open or in some cases, they are paying you to start a new business. So, why not jump in now if you’ve been considering starting a business.
For many businesses, we understand that there is plenty of confusion and frustration with this program. However, I always recommend that you direct your energy on looking for ways you can turn this frustrating experience with this pandemic into opportunities that will potentially be beneficial for you and your community.
As your business advisor, I’m always here to help!