The CIBC CEBA Agreement: What You Need to Know

The Canadian government`s CEBA (Canada Emergency Business Account) program has provided much-needed financial assistance to countless small businesses affected by the COVID-19 pandemic. As a major Canadian bank, CIBC is one of several institutions that have partnered with the government to administer CEBA loans. However, before applying for a CEBA loan through CIBC, it`s important to understand the terms of the CIBC CEBA Agreement.

What is the CIBC CEBA Agreement?

The CIBC CEBA Agreement is a legal contract that outlines the terms and conditions of the CEBA program as administered by CIBC. By signing the agreement, you agree to the terms of the loan and promise to repay it in accordance with those terms.

What are the terms of the CIBC CEBA Agreement?

The terms of the CIBC CEBA Agreement are fairly straightforward. First and foremost, the agreement outlines the amount of the loan you are eligible for, as well as the interest rate and repayment terms. Currently, CEBA loans through CIBC have a 0% interest rate until December 31, 2022, after which time the rate will increase to 5%. Repayment of the loan is required by December 31, 2025.

In addition, the CIBC CEBA Agreement includes a number of conditions that you must meet in order to be eligible for the loan. These conditions include:

– Having a CIBC business bank account that was opened prior to March 1, 2020

– Having a payroll of between $20,000 and $1.5 million in 2019

– Not having previously applied for a CEBA loan through a different financial institution

– Using the loan proceeds to cover eligible expenses, such as rent, utilities, and property taxes

What happens if you don`t comply with the CIBC CEBA Agreement?

If you fail to comply with the terms of the CIBC CEBA Agreement, it`s important to understand that there are consequences. For example, if you use the loan proceeds for ineligible expenses, such as payroll or debt repayment, CIBC may demand immediate repayment of the loan. In addition, if you fail to repay the loan in accordance with the terms of the agreement, CIBC may take legal action against you to recover the funds.

Final Thoughts

The CIBC CEBA Agreement is an important legal document that outlines the terms and conditions of the CEBA program as administered by CIBC. Before applying for a CEBA loan, it`s crucial that you carefully review and understand the terms of the agreement in order to avoid any potential negative consequences. As always, it`s a good idea to seek professional advice from a lawyer or accountant if you have any questions or concerns.