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The government is doing what it can to get us through this current interruption in our economic health. That is a good thing, so long as we legitimately qualify. We wonder, should we take the loans and subsidies or not? We worry “what if the government will want to take the money back” later or not. The simple answer is both yes and no. If you cheat you will be caught. If you are legit, then you don’t have much to worry about.

The general line of thinking is that If you don’t need to borrow, you probably shouldn’t. However, from a risk management perspective, if taking the loan will carry you through the bad times and ensure you are still in business when the inevitable upturn in the economy happens, it is a prudent decision to take the loan, so long as there is a reasonable chance your cash flow will be able to handle the repayments.

In respect to the CEBA $40,000 loan to help eligible businesses pay for operating expenses, payroll and other non-deferrable items. Until December 31, 2020, the Canada Emergency Business Account will be funded as a revolving line of credit.

If your business truly qualifies for the loan, then this is a really good deal. I am sure that CRA will be taking a close look at the over 600,000 businesses who have taken the loans. Being able to only pay back $30,000 makes CEBA a great deal. It is important to make sure you qualify for the government assistance.

Regarding the rent subsidy, the program has problems in that the program uses CMHC and a lot of Landlords can’t or won’t work with CMHC. I spoke to our local Minister who says that the government is aware of the problem and only about half the landlords are participating. The government intends to try to influence more landlords to participate.

You can be sure that CRA will be looking very closely at all assistance programs. They are already advising people to use the “snitch line” to report suspected cheaters.

The service’s “Leads Program” updated its website this week to include the Canada Emergency Response Benefit (CERB), the Canada Emergency Student Benefit (CESB) and the Canada Emergency Wage Subsidy (CEWS) funds to its list of reportable cheating activities.

As of June 1, the government had processed more than 15 million applications for CERB, including more than eight million unique applicants, and paid out more than $42 billion in benefits.

What this means is that there will be a lot of desk audits and likely 50% gross negligence penalties. In general, the government assistance is a great help and is appreciated.

If I can help out with any small business funding, please do not hesitate to contact me:

Terry Lynch (416) 315-1787