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The Canada Emergency Business Account (CEBA) is an initiative of the Government of Canada.  The official Government website is

What Can the CEBA Loan Be Used For?

What Can the CEBA Loan Be Used For?
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Are you a small business owner or not-for-profit organization grappling with the financial strain of the COVID-19 pandemic? The Canada Emergency Business Account (CEBA) loan program might just be the lifeline you need. In this blog post, we’ll take a deep dive into the CEBA program, its features, and what can the ceba loan be used for, to help your business thrive during these challenging times.

Overview of the CEBA Loan Program

What Can the CEBA Loan Be Used For?

The CEBA loan program is a government-backed initiative aimed at providing much-needed financial support to small businesses and not-for-profit organizations affected by the COVID-19 pandemic. To qualify for the emergency business account CEBA, businesses must meet specific eligibility criteria, with only one CEBA loan allowed per 9-digit CRA Business Number.

An expansion of the CEBA eligibility criteria, known as the Non-Deferrable Expenses Stream, allows more small businesses to access interest-free loans. Applicants with a payroll of less than $20,000 must have incurred and projected eligible non-deferred expenses between $40,000 and $1.5 million as of March 1, 2020. Business owners must apply for CEBA at their primary financial institution, and applications are not allowed at multiple financial institutions.

For any inquiries related to CEBA enrollment requests or remediation requests, businesses can contact the Government of Canada’s CEBA Call Centre at 1-888-324-4201, providing their business bank account details.

Key Features of CEBA Loans

What Can the CEBA Loan Program Be Used For?

One of the most attractive features of CEBA loans is the interest-free financing of up to $60,000. The loans also offer the possibility of partial loan forgiveness if repaid by designated deadlines. Keep in mind that repayment options for CEBA loans may differ across various financial institutions.

To be eligible for loan forgiveness, CEBA loans must be repaid by December 31, 2023. The loan forgiveness amount depends on the amount borrowed.

  • If a business borrowed $50,000 through CEBA and repaid $35,000 by December 31, 2023, they would receive a maximum loan forgiveness of $15,000.
  • Businesses that borrowed $40,000 or less through CEBA can receive a maximum loan forgiveness of $10,000.
  • The forgiveness rate for loans between $40,000 and $60,000 is determined by a blended rate.

Borrowers need to fulfill the Government of Canada’s eligibility criteria and maintain good standing to secure an extension for the repayment deadline of CEBA loans, ensuring they can meet their regularly scheduled debt service.

Eligible Business Expenses

What Can the CEBA Loan Be Used For? An Expert Guide

CEBA loans can be used to cover a variety of eligible business expenses, such as payroll, rent or lease payments, and insurance and property taxes. These expenses are subject to verification, ensuring that the funds are utilized for their intended purpose.

Each of these eligible expense categories will be explored in greater detail in the subsequent subsections.

The primary focus of CEBA loans is to help businesses maintain their workforce during the ongoing pandemic. Businesses aiming to qualify for CEBA loans via the payroll stream need to show payroll expenditures ranging from $20,000 to $1.5 million for 2019. Eligible small businesses could apply for CEBA loans through the payroll stream starting from April 9, 2020.

Eligible Non-Deferrable Expenses (ENDE) refer to the expenses necessary for businesses to qualify for CEBA. CEBA loans can be utilized for eligible business expenditures, including:

  • Payroll and other employment expenses
  • Rent
  • Utilities
  • Property taxes
  • Insurance
  • Professional fees
  • Lease or rent payments for vehicles and equipment

These funds are intended to help businesses retain their employees and navigate through these difficult times.

Rent or Lease Payments

Another significant expense for businesses is rent or lease payments for their premises. CEBA loans can be used to cover rent or lease payments for real estate and capital equipment utilized for business operations.

CEBA loans ease the financial strain on businesses during the pandemic by covering rent or lease payments for business-oriented real estate. Similarly, CEBA loans can also be utilized for rent or lease payments for capital equipment used for business purposes, further supporting businesses in their quest to stay afloat and succeed.

Insurance and Property Taxes

In addition to payroll and rent or lease payments, CEBA loans can also be used to cover insurance and property tax expenses. These expenses may include insurance premiums, property taxes, and payments for insurance-related costs such as health insurance, life insurance, and disability insurance.

Take into account that CEBA loans cannot be applied towards any additional expenses related to:

  • insurance
  • property taxes
  • legal fees
  • penalties

By covering these essential expenses, CEBA loans provide additional financial support to businesses in need.

Restrictions on CEBA Loan Usage

An Expert Guide of What Can the CEBA Loan Used For?

While CEBA loans can provide much-needed financial relief to businesses during these challenging times, there are restrictions on how they can be used. CEBA loans are only permitted for the non-deferrable operating costs of businesses, which means they cannot be used for refinancing existing debt or paying dividends to shareholders.

Businesses should be aware that if the Canada Emergency Business Account (CEBA) loan is used for anything other than intended purposes, they may lose access to the 0% interest rate or forgiveness features of the loan. Not adhering to the program guidelines may cost them future financing options. Hence, it’s paramount that businesses use CEBA loans strictly for qualifying business expenses and manage them through their business operating account.

What Can the CEBA Loan Be Used For? Alternatives

What Can the CEBA Loan Be Used For?

For businesses that were not eligible for CEBA loans, there are alternative grants and financial support programs available. Some of these options include:

Each of these alternative financing options comes with its own set of advantages and disadvantages, which businesses should carefully consider before making a decision. To conduct business effectively, businesses should thoroughly evaluate all possible options and select the one that aligns best with their specific needs and situation.


The CEBA loan program, also known as the CEBA program, has provided crucial financial assistance to businesses affected by the COVID-19 pandemic, enabling them to maintain their workforce, cover operational expenses, and weather the storm. With flexible repayment options and partial loan forgiveness, if repaid on time, CEBA loans have been a lifeline for many businesses during these unprecedented times.

Frequently Asked Questions

What can I use CEBA funds for?

CEBA funds can be used to pay for non-deferrable operating expenses, including payroll, rent, utilities, insurance, property tax, and regularly scheduled debt service. Businesses with a payroll of $20,000 to $1,500,000 are eligible to apply for Payroll Stream applications through their bank.

Make sure to create a list of your non-deferred expenses to ensure an effective use of your CEBA loan.

How much of the 60000 CEBA loan is forgivable?

Up to $20,000 of the CEBA loan is forgiven, depending on how much you spend on employee wages and certain other expenses.

What are eligible non-deferrable expenses for CEBA?

Eligible non-deferrable expenses for CEBA include rent, property taxes, utilities, and insurance, all subject to Government of Canada verification and audit.

What is the maximum amount businesses can borrow through CEBA loans?

CEBA loans allow businesses to borrow up to a maximum of $60,000.

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