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20% of small businesses too small to qualify for CEBA loan: CFIB

Smallest businesses with payrolls under $50,000 are not eligible for the support.

April 14, 2020   by PLANT STAFF

TORONTO — Many small businesses are reporting eligibility requirements for Canada Emergency Business Accounts (CEBA) are shutting them out, according to a survey by the Canadian Federation of Independent Business (CFIB).

“Nearly 80% of small businesses are fully or partially closed due to COVID-19 with little or no revenue coming in, while their bills continue to pile up,” said Dan Kelly, CFIB’s president.

The federal program allows banks to offer a loan of up to $40,000 backed by the federal government with no interest and up to $10,000 forgivable when fully repaid by December 2022. But Kelly said the smallest businesses with payrolls under $50,000 are not eligible for the support.

CFIB notes CEBA loans require a business to have between $50,000 and $1 million in payroll. As many small firms pay the owner and the owner’s family through dividends rather than salary, this test excludes thousands of long-standing firms. Others, including micro-sized business and newer firms, are also finding themselves ineligible for the program.

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CFIB recommends the some improvements to CEBA:

  • Eliminate the payroll eligibility to access the loan, particularly the $50,000 minimum.
  • If a payroll test remains, drop the minimum payroll requirement to $10,000 and allow dividends paid to family working in the business to be included.
  • Increase the maximum threshold from $1 million to $2.5 million and/or consider alternative means of assisting firms (such as forgivable loans) that have been completely shut down but require larger amounts of cash to help them with their fixed costs.
  • Ensure all businesses have access regardless of where they bank, including through smaller credit unions
  • Allow businesses to use the loan to access $10,000 as a grant right away to help cover costs, including rent


These preliminary findings are based on 10,620 responses collected from CFIB members to a controlled-access web survey. Responses were received between April 10 and April 13. Margin of error is +/-0.9%, 19 times out of 20.