Wealth Strategies: Government Support for Business Owners During Covid-19
Milestone Wealth Management Ltd. - Apr 18, 2020
We continue to receive information and amendments on federal government aid packages available for small and medium-sized businesses affected by the COVID-19 situation.
This includes both wage subsidies and credit through the Canada Emergency Business Account (CEBA) and loan programs as part of the government’s Business Credit Availability Program (BCAP) of $65 billion in direct lending to small and medium-sized businesses. The BCAP will be administered by the Business Development Bank of Canada (BDC) and the Export Development Canada (EDC) with loans facilitated through banks, credit unions or other financial institutions.
The following table is a summary of the federal government support for business owners during Covid-19:
Source: Advisor's Edge
Please note that with respect to the CEBA support specifically, the benefit of up to $40,000 is restricted to operating expenses only, which leaves no interpretation to allow dividends to be paid from these funds. However, the company can still pay dividends from other sources of funds. Therefore, this loan does not restrict the payment of dividends, just the use of the funds loaned. Businesses are also able to defer taxes owing on or after March 18th to September 1st, as well as GST payments and customs duties extended to June 30th.
Farmers can also receive credit through Farm Credit Canada, and if loans are due from the Advance Payment Program on or before April 30th, an additional six months will be granted to defer payment.
Further details can also be found via the Government link: https://ceba-cuec.ca/