How a Leasehold Agreement and its Clauses can Impact Your Exit Strategy

Buying-Selling A Practice, Finance|Wealth, Practice, Real Estate, Resources

A client of mine is having anxiety about her expiring premise lease. She wants to stay – it’s a great building and she invested almost $1 million in leasehold improvements and non-moveable fixtures. But the landlord is inserting a building demolition clause in all the renewal leases. For someone who’s three years from retiring and planning her exit strategy, moving isn’t part of the plan.

As I explained to my client, a landlord wants AAA tenants – those who have a solid track record and pay rent on time – particularly a successful professional like her. However, all landlords also have contingency plans to sell a building and they want the right to relocate you within the building (RELO) or terminate your lease and deliver the property vacant, should the new owner want to reposition the building or demolish it (DEMO).

These clauses and rights favour landlords by making a building more valuable. Tenants hate these clauses; landlords and their realtors love them. This doesn’t discount the fact that full occupancy and high rents are still the main priorities for a landlord. But a RELO and/or DEMO clause makes the property more valuable and/or saleable to multiple interested buyers, which is another high priority of the landlord.

As a tenant, you won’t know the details of the DEMO clause specific to your lease until the renewal lease proposal arrives. My client’s current lease says that her landlord does not have to provide the renewal lease proposal until precisely six months before the current lease expires. This give tenants very little time to plan for relocation and a savvy landlord knows that. Landlords have the upper hand in these situations.

In working with my client on her exit plan, we want at least 10 years of tenancy from the date she sells in order to obtain 10-year-term financing for the buyer. Ten-year-term financing allows for increased practice sale prices. But it’s more likely that we’ll get three to five years of secured tenancy, after which the DEMO clause (or “threat”) will arise. Assuming my client sells in about three years, as per her plan, the new owner will then have as little as one or two years before being forced to move. And this, of course, will substantially reduce the sale price of any practice.

There’s the option to move and purchase a property. But that means starting the hunt for a business space now. For my client, that means about one year to find a nearby property, buy it and design/build a new office. It’s tight but it can be done. And buying real estate is always a good move, even if it is a long-term investment (think 10 years or more) and her career exit plan is three years.

It may seem to be a conflict, but don’t attach career to a real estate investment. These are
separate decisions with differing commitments and timelines. Real estate can generate income for you and your family for many years. Your practice only generates income for you while you own it and to a lesser extent, if/when you become an associate with a new buyer.

The alternative is to stay and gamble that the landlord will not evoke the DEMO clause (a 50/50 probability) until 2023 or 2024, based on what might be happening in the surrounding real estate area. Or there’s the option to sign a new lease in a neighbouring building, move and custom build another office (as my client did 20 years ago). To do so means abandoning the leaseholds of the current suite (estimated value in the hundreds of thousands of dollars) and getting a bank loan to build the new office – and be at the whim of another landlord.

Landlords will always position their holdings for resale and will not accommodate tenants who occupy a relatively small portion of their building (like my client’s practice, which is just 3% of the entire property). And so, as I suggested to her, buying her own property may be the best move (quite literally). The alternatives for professionals in leasehold agreements – who are also planning their exit strategy and career retirement – are limited.

Find something in the area you want and secure a long-term real estate investment. The bonus is that it’ll become a second retirement income once the practice is sold. As has been said by a billionaire oil tycoon, “If it appreciates, buy it. If it depreciates, lease it.” Don’t let your practice depreciate.

TIMOTHY BROWN

is Chief Executive Office of ROI Corporation Canada’s national professional practice and brokerage firm.

Rate:

Episode 11: Vision Therapy with Dr. Virginia Donati

Eyes Wide Open, Podcasts, Practice, Resources, Specialty Practice

Glen Chiasson discusses all things Vision Therapy with Dr. Virginia Donati, president of Vision Therapy Canada.

About the Guest

Dr. Donati attended the Pennsylvania College of Optometry where she first learned about vision therapy by becoming a patient herself and graduated in 2006. Upon returning to Canada she brought her passion for vision therapy to her own patients and to the profession at large as the founding VP of COVT&R and the current President of its successor organization, Vision Therapy Canada. She is an Instructor of the Optometric Extension Program’s Clinical Curriculum in Vision Therapy and the lead instructor for VTC’s Practical Vision Therapist Accreditation Program (PVTAP). She lectures across North America in the field of binocular vision and is keenly interested in the education and training of new and existing Vision Therapists and Optometrists.

Episode Notes

Virginia Donati shares her personal story of how a life changing experience while studying at PCO cemented her intense interest in and passion for Vision Therapy.

Glen plays devil’s advocate around some of the professions perceptions of vision therapy, including on “the science”, and the perceptions of expense to patients.

Donati, of course, stands her ground, and opines as to why the medical profession, and even many in the optometry world including optometric educators, do not take VT as seriously as it deserves.

She outlines the challenges facing the sub-specialty and encourages ODs to think about their future role with Vision Therapy being a part of their practice and how Vision Therapy can help differentiate their practice.

Lastly, Dr. Donati outlines specific steps that can be taken by ODs to learn more and become a VT specialists if they so desire.

Key Quote: “Demand is there, patients are there but this may not be recognized”.

Resources

Dr. Glen Chiasson

Dr. Glen Chiasson is a 1995 graduate of the University of Waterloo School of Optometry. He owns and manages two practices in Toronto. In 2009, he co-hosted a podcast produced for colleagues in eye care, the “International Optometry Podcast”. He is a moderator of the Canadian Optometry Group, an email forum for Canadian optometrists. As a host of “Eyes Wide Open”, Glenn looks forward to exploring new new technologies and services for eye care professionals.

Dr. Chiasson enjoys tennis, hockey, and reading. He lives in Toronto with his wife and two sons.

Dr. Chiasson splits EWO podcast hosting duties with Roxanne Arnal.

Rate:

Insight with Dr. Virginia Donati

Insights

Practicing optometry in Peel since her residency in 2005. She was born and raised in Brampton.

Founding Vice President of COVT&R, now know as Vision Therapy Canada (VTC), now President of VTC.

Lead instructor for Practical Vision Therapist Accreditation Program (PVTAP).

Dr. Virginia Donati

Optometrist, FCOVD

University of Waterloo, Bachelor of Science

Optometry, Pennsylvania College of Optometry

President of Vision Therapy Canada

Why did you choose your field?

I actually decided that I was going to be an optometrist when I was 10 years old. I remember the day very clearly. My mother took me to the optometrist (my first visit since pre-school) and I was in awe of all of the machines and lenses and knobs. When he was done, he put a trial frame on my face and I almost cried. To me, he was a hero! That afternoon, I asked my mother to take me to the library so that I could research what I needed to do to become an optometrist like him. Many years later, he also gave me a summer job at his front desk, an extern position for high-school co-op, and wrote a reference letter for me for optometry school. A special thank you to Dr. R. Lapienis!

What is currently the most exciting thing in your field to help patients?

The most exciting thing for me is the Vision Therapy scope. When you see patients who are incredibly symptomatic, or those whose struggles they didn’t even know were due to a vision problem, and intervene with treatment that provides relief, it is an incredibly rewarding experience. In our profession, Vision Therapy remains underutilized and under-prescribed. My wish and hope for our profession is that more optometrists learn about what it is that Vision Therapy can provide for patients and that more optometrists start to provide Vision Therapy in their practice. We need many more providers across the country!

What advice would you give a new grad today?

I would say that new grads shouldn’t be satisfied to sit around and refract all day. Find a niche, a “specialty” area of our profession which you are passionate about and educate yourself. Whether that’s Vision Therapy, low vision, contact lenses, dry eye, etc. Find something that you find mentally stimulating, fun and that brings you joy. When you do that, every day is different and every patient a new adventure. You will never work a day in your life!

What is something you believed to be true for a long time only to find out you were wrong?

I believed that “the” prescription was what you measured in the phoropter. In reality, it’s really a negotiation between what you measure and what you know the patient is truly asking for. It’s a mix between the patient’s vision system and your expertise. There’s a certain amount of artistry and individuality to it. To ignore this fact is to become a living auto-refractor and to become obsolete.

What is one thing you own that you probably should throw away but never will?

I still have my first pair of glasses from 1989. They’re small, weak, dated and scratched beyond belief, but I can’t bring myself to throw them out. For me, they are a reminder of the awe I experienced that day at my optometrist’s office and a reminder of why I decided optometry was the profession for me. After all, who doesn’t want to feel like somebody’s hero? They are also pretty darned cute!

Tell me something few people know about you.

I actually had a very difficult time in my first year of optometry school. A binocular vision problem caused me to struggle to keep up with all the reading and studying that was required. I sought treatment at my school’s pediatrics department. It was my first experience with Vision Therapy. That intervention allowed me to not only improve, but thrive! It gave me the passion for Vision Therapy that I carry with me today. Looking back, I actually feel very lucky to have had that struggle!

What is your favourite past-time/hobby?

I find it incredibly relaxing and therapeutic to crochet. It’s something I taught myself to do when I was expecting my first child and something I continue to do. Some of my earliest work, with all of it’s dropped stitches and uneven tension, is work that I am the most proud of. When I look at it, I see someone who was not distracted by failure. At this point, I wouldn’t say I’m an expert at it, but good enough that I won first prize at my town’s fall fair two years in a row!

Rate:

Staying Connected in Uncertain Times

Human Resources, Managing Others

The past couple of weeks of the COVID-19 pandemic have brought more unfortunate “firsts” than most of us care to think about. With so much uncertainty, everyday decisions become harder to make.

Most ODs have now officially laid off their staff, save for the one or two members needed to answer calls and emails, reschedule appointments and other administrative tasks.

Now at home, with little work to do, the challenge is to figure out a way to maintain a sense of purpose and hope.

There are actually a number of ways that you can stay connected and support those around you.

One way I am doing this is by continuing to support local businesses. For instance, I have ordered eggs, sausage, and canned goods from a local family owned store. They are offering delivery twice a week during this time. Not only am I looking forward to that delivery of food today, I feel good about the fact that I am helping another family keep their business going.

Socially, I am starting to feel disconnected, so my friends and I have embraced the concept of remote “gatherings”. Once a week, we are setting ourselves up with a computer, remote access and our favourite beverage. This week, everyone has been challenged to dig up some old pictures from high school to share.

Over the past couple of weeks, I have also been part of remote meetings with some of my clients and their teams. I am struck by how much they enjoyed this face-to-face interaction. These are people who normally spend a large portion of their week together, but suddenly they aren’t seeing each other at all!

There was genuine joy to see each other and share how their experience has been so far. I encourage you to consider doing something like this with your team. Keep it social, share how everyone is staying active and busy – and give your teams a chance to stay connected.

Another way to create purpose right now is to look for ways to give during this time. I have seen lots of opportunities to foster animals. What a great time to do this! You will have time to give that animal lots of attention.

On a professional front, I had a client reach out yesterday to ask how he could help me with my business – he has time on his hands and believes in what I do. Incredible! Who can you reach out to and offer a helping hand? Letting someone know that they are not alone could be all the help they need.

It will take some time to settle into a new normal on the other side of this, but we will get there and we will be better for it.

KELLY HRYCUSKO

is the co-founder and managing partner of Simple Innovative Management Ideas (SIMI) Inc. and expert Practice Management contributor for Optik magazine. She can be reached at info@simiinc.com.

Rate:

Managing a Productive Remote Workforce

Human Resources, Managing Others

With growing measures to stop the spread of COVID-19 (Coronavirus), a large number companies across the globe have had to suddenly tell their employees to work from home.

For many employees, this is something they’re happy to embrace – once they’re setup with the right tools, they will stay productive and continue with business as usual from a home office environment.

However, for some, the directive to work from home can spell disaster if management doesn’t fully recognize what’s required to help those individuals continue to thrive in a changing, more isolated environment.

Easing the Transition:

So, with no choice in the matter, how do we make this prompt transition to a home office as smooth as possible for everyone, regardless of their workplace preferences or personality?

First, ensure you’ve addressed any technical roadblocks by outlining a clear list of what is needed for each individual to get setup at home. Help fill in any hardware gaps, such as:

Loan of a laptop or desktop screens
A comfortable office chair
Desk phone and headset
Some extra printer cartridges

As well, make sure everyone is comfortable with remote file sharing on such platforms as:

Google Drive
Dropbox
MS OneDrive
OneHub

Next, help employees understand working hours and scheduling requirements whilst away from the daily office structure. Assist them with creating a sharable task schedule or tracking system, using such tools as:

Trello
Monday
SmartSheet
Jira
Toggl

Also, suggest that they build their own ‘Family Schedule’ with the other family members who are stuck in the house. This will minimize distractions and anxiety as everyone in the household has established guidelines and boundaries during work hours.

Stay Connected:

Once everyone is set up remotely, keep in mind that there is only so much you can communicate through text and group emails. Overtime, not working with people face to face can sometimes make it difficult to guide them or fully gauge their emotions, intentions and well-being – especially at this time when we are all dealing with a lot of change and unknowns in our daily lives.

When in a standard office environment, studies show that many employees rely on the morning team meeting to gain positive energy and feedback from the others in order to get their day started. And, during breaktime, workers often look forward to the social aspect of pouring a cup of coffee and engaging in spontaneous chatter about news, sports, or movies.

So, if you haven’t already, start by implementing an efficient messaging app (such as Slack) to make back and forth online discussion much faster and easier. But don’t stop there. Get your remote team in the habit of replacing some of those messages and emails with phone calls instead, even doing some of your calls via FaceTime. And for your team discussions, maintain a cohesive group feel by doing video meetings using Skype or Zoom on a regular basis – seeing faces and sharing screens can go a long way towards morale and productivity.

Extra Tools to Help You Manage:

With the long-term outcome of this pandemic still very much unknown, people may have to continue working remotely for quite some time. As this plays out, business owners and managers need to feel confident that they can maintain a motivated, engaged workforce from afar.

Consider tools such as the PXT Select suite of behavioural, engagement or leadership assessments to help you continue the alignment and understanding of your team’s strengths, weaknesses, and abilities – giving you more power to coach and develop your people to their full potential during this unprecedented time in the workplace.

Reassurance:

No matter what, make sure your team knows that you’ve got their back. ‘Social distancing’ does not mean anyone will be sent home and forgotten about – everyone should feel trusted, valued and looked after for as long as they’re working remotely and beyond.

Want to discuss more about this topic?

Get in touch to share your thoughts and discuss more options to help keep your staff engaged:
info@fitfirsttech.com
1-800-513-7277

Eu ea turducken spare ribs id burgdoggen culpa rump. Excepteur et sirloin strip steak sint. Flank tongue tri-tip cow magna. Cow burgdoggen in frankfurter shoulder anim pancetta sausage proident laboris boudin magna. Ut enim occaecat, eu nulla salami spare ribs jerky aute cillum beef ribs. Proident elit ullamco bacon tenderloin ea.

Rate:

Episode 10: The New ULTRA Multifocal for Astigmatism Contact Lens

Podcasts

Dr. James (Jim) Hoffman, an early trialist of B+L’s new ULTRA Multifocal for Astigmatism contact lenses, shares his experience and best practices with this new contact lens for presbyopes with astigmatism.

About the Guest

Dr. Jim Hoffman graduated from the University of Houston College of Optometry in 1981 and was awarded fellowship in the American Academy of Optometry in 1985. Dr. Hoffman excels in pediatrics and advanced contact lenses and often lectures to his peers in USA and Canada.

Dr Hoffman is an independent practice owner with two practices in Orange Park Florida (south of Jacksonville), where he practices with his wife Dr. Karen Larson.

Episode Notes

Dr. James (Jim) Hoffman shares his experience with the new ULTRA Multifocal for Astigmatism Contact Lens from Bausch + Lomb. Dr Hoffman was among the earliest ODs to work with the lens. He’s been impressed with the lens and explains how it has helped him maintain an innovative edge in a competitive market environment.

He reveals his pre-marketing strategy for the lens including identification of which specific patient types are best, and which to avoid. Jim relays his experience in fitting the lenses and offers up advice to get the most out of this innovative new product, particularly for patients that have been frustrated with the challenge of finding a great solution for presbyopes with astigmatism.

He explains why the B+L fitting guide is important and shouldn’t be ignored.

Jim explains his approach to different patient types, including CL drop-outs, in the exam room conversation and shares his experience with adaption and patient follow ups. He reveals his “go-to” question to open the conversation on contact lenses in general.

Key Advice: “Don’t use your past experience to fit a lens that’s never been made before.”

Resources

ULTRA Multifocal for Astigmatism

Dr. Glen Chiasson

Dr. Chiasson enjoys tennis, hockey, and reading. He lives in Toronto with his wife and two sons.

Dr. Chiasson splits EWO podcast hosting duties with Roxanne Arnal.

Rate:

Episode 9: Dr. Robert Allaway Discusses a New Exit Strategy Option for ODs

Eyes Wide Open, Finance|Wealth, Podcasts, Practice, Resources

Dr. Robert Allaway explains the Vision Alliance acquisition model, who’s behind it, and how it fits a need for practice owners that other models do not offer.

About the Guest

Dr. Robert Allaway is the Chief Optometry Officer of Vision Alliance, a new exit strategy option to help practice owners bridge the gap between full ownership and retirement. Robert is in private practice in Salmon Arm, BC where his practice has expanded over the years from a single location to three locations with four partners and two associates. He was on the Board of Directors of Eye Recommend for 12 years.

Dr. Allaway joined the Vision Alliance team founded by Ken Barbet, former Eye Recommend CEO. Vision Alliance provides a a unique option for practice owners to exit private practice with flexibility, while removing the operational burden of the practice owner.

Episode Notes

Robert explains the genesis behind the formation of Vision Alliance, including the roles of key principals and partners, including Ken Barbet, Deanna Hansuk and Patrick Cunningham.

He provides a full explanation of how the Vision Alliance model is centred and designed around independent Optometry and the practice owner. He explains the flexibility the approach offers to practice owners as well as the ownership opportunity provided to new entrants, and contrasts Vision Alliance to corporate models.

Robert drills down into a good level of detail on what a partnership with Vision Alliance looks like, including how it impacts operations, staff management, practice branding and marketing and more.

The financial model is also outlined, including the extent to which practice owners retain interest and how and when they can cash out.

Best Quote: “Vision Alliance is a bottom-up approach driven by the Optometrist.”

Resources

Dr. Glen Chiasson

Dr. Chiasson enjoys tennis, hockey, and reading. He lives in Toronto with his wife and two sons.

Dr. Chiasson splits EWO podcast hosting duties with Roxanne Arnal.

Rate:

Is This Really The Best Time To Buy A Practice?

Buying-Selling A Practice, Practice

ABSOLUTELY!!! And here is why. If your ultimate goal is to own your own practice, then do not pass on a good office because of the times we are currently in. An economic crisis can be the best possible time to invest in yourself! As an associate, this could be the moment you buy yourself a job because no one knows what life will be like once the doors re-open.

Every recession creates opportunities. And inaction does not mean safety in uncertain times. Rather than simply hoping things will get better, you should act to improve your situation and position yourself for growth when the things recover.

If you are an associate, your income has and will be controlled by the principal you work for. If you work in an office with the principal, there is a very high chance your schedule is going to be impacted particuarly because the principal will be in the negative due to the clinic being closed. Therefore, a principal may choose to work longer hours to make up for this. You cannot blame someone for choosing to work more or take the better quality patients when they have owned the practice during this financially critical period. Is it not better to be the owner of a closed office when the doors finally open rather than an associate waiting for the return of consistent hours?

Buyers are reluctant to spend money to make acquisitions during an economic downturn. However, downturns can be an ideal time to invest in your own practice.

1) As an associate, how long will it take for you to personally return to work? How long will it take you to return to your same level of billings prior to COVID-19?
2) The country’s key lending rate has now fallen from 1.75% at the start of the month to its current rate of 0.25%. The last time the overnight rate fell so much in the span of a month was in 1992. Therefore, prime rate as of today (March 31, 2020) is 2.45% and will most likely decrease by end of year. There has never been a better time to borrow.
3) The sale will not close until the doors re-open. Again, with the closures, revenue is not lost but deferred. By default, there will be a demand for visits.
4) During this time as you prepare to take over the practice, you can engage the team to brainstorm and generate new ideas that could help you when the doors re-open. After all, the employees of an established practice are on the frontline and have a lot of insight into patient and practice needs.
5) Yes, there will be stricter protocols required for infection control. That will not change regardless if you are an owner or currently an associate.

While our situation today is different from the Market Crash of 2008, it is worth noting that Warren Buffett in a 2008 Berkshire Hathaway shareholder meeting said that the market might go up, the market might go down, the economy might fluctuate, but there will always be intelligent things to do. What an empowering message!! He went on to further say, “In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21½% prime rate in 1980; and a Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. While COVID-19 is something we have never seen, the fact is that globally, we will overcome it just as we did these other significant crises.

Buying an office now gives you the opportunity of time. Usually, when people are purchasing an office, they do not have enough hours in the day to plan a successful transition. A personal marketing plan rarely is made, staff training to ensure the smooth transition does not happen and you as a new owner do not have the time to develop critical business skills such as financial management, effective communication. If you buy an office that does not close until the doors are to open for business again, you have the benefit of this time to make serious and achievable plans.

History has proven that during challenging times that all the great fortunes were made. The most successful self-made people did not sit home in fear because of a financial crisis.

Ultimately, during tough times, it’s important to keep a positive outlook rather than focus on a bleak picture. It takes courage to invest in times of uncertainty, but if you do it wisely, you’ll see positive results down the road. The reality is that people will still need to see their Optometrist. Healthcare has proven its ability to manage during and post financial crises.

JACKIE JOACHIM

Jackie has 30 years of experience in the industry as a former banker and now the Chief Operating Officer of ROI Corporation. Please contact her at Jackie.joachim@roicorp.com or 1-844-764-2020.

Rate:

Episode 8: FYidoctors’ Al Ulsifer on COVID-19 and L Catteron Capital Injection

Eyes Wide Open, Podcasts

Al Ulsifer, Chair & CEO of FYidoctors shares his views on how COVID-19 may change optometric practice, and what the capital injection of over $100 million means to the FYidoctors group in a free-ranging discussion with EWO podcast host, Dr. Glen Chiasson.

About the Guest

Al Ulsifer graduated from the University of Waterloo as an optometrist in 1990. After graduating, he became one of the founders and the managing partner of Northern Vision Centre, which developed into one of Canada’s largest independent optometric practices.

In 2008, Al oversaw the creation of FYidoctors, which still stands as the largest business merger in Canadian history in terms of the number of companies involved. He was awarded the Ernst and Young Emerging Entrepreneur Award for Western Canada in 2008 and the Prairies Entrepreneur Award in 2012. Currently, Ulsifer serves as CEO & Chairman of the FYidoctors Board of Directors.

Episode Notes

Glen and Al discuss the impact of COVID-19 on optometric practice, including what the future may hold for online purchasing and tele-medicine in the industry.

They discuss direct-to-consumer brands and capital investment, including Warby-Parker, and the difficulty these companies are facing in meeting investors’ expectations even before the COVID-19 event. (See link in resources.)

On the recent announcement of an minority equity stake by the L Catteron group, Al explains what it means to the group and the individual practices as well as the implications for eye care in Canada as a whole.

Key Quote: “Being doctor controlled has always been our story and continues to be.”

Resources

Dr. Glen Chiasson

Dr. Chiasson enjoys tennis, hockey, and reading. He lives in Toronto with his wife and two sons.

Dr. Chiasson splits EWO podcast hosting duties with Roxanne Arnal.

Rate:

Financial and Legal Experts Provide Practice Owner Advice

Finance|Wealth, Resources, Tax & Legal Matters

A live webinar, “Financial Advice for Turbulent Times brought financial and legal subject matter experts to provide information on the newly available federal government COVID-19 support programs and provide a perspective on the longer-term impact on practice value. The webinar was sponsored by BMO Bank of Montreal and ROI Corporation, Canada’s largest health professional brokerage.

Many questions posed by attendees are of interest to all practice owners. Below, we have recapped the key points and questions for the benefit of practice owners.

The Canadian Emergency Wage Subsidy (CEWS) and Canadian Emergency Business Account (CEBA) were the key topics reviewed.

The experts noted that both of these programs are very new. The government announcements are made with high level bullet points that don’t often drill down into the necessary details that clarify the benefits.

The general advice to practice owners is to make the claims even if there is some uncertainty as to the eligibility or requirements. If in doubt… SUBMIT THE CLAIMS.

Canadian Emergency Wage Subsidy (CEWS)

The CEWS provides a wage subsidy of up to 75% of wages for retained employees to a maximum amount of $847 per week retroactive to March 15 until June 6.
There are two key eligibility factors:
- Employers with an annual payroll of $50,000 to $1,000,000
- Show a 30% year over year decline in revenue for the periods of March, April and June.

Canadian Emergency Business Account (CEBA)

The CEBA provides a $40,000 line of credit with specific terms and conditions.
Balance owing as of Dec. 31, 2020 is converted to a 5-year term loan until Dec, 2025
The is no interest until Juan 2023, and thereafter 5% interest
If 75% if the loan is paid back on/before Dec. 31^,2022 – 25% of the loan is forgiven
Apply to the CEBA through your principal business banking institution

Q&A recap:

Can the CEWS be used to pay ourselves as practice owners?
So long as the practice owner is on the payroll it appears as though the CEWS applies. Employers will be asked to provide a summary T4 report for the year 2019 to provide evidence of payroll eligibility.

As a business owner am I eligible for CEWS benefit?
IF you are on the official payroll of the business, YES, otherwise, the rules are not clear. Individuals including self-employed and independent contractors experiencing loss of income due to COVID-19 should refer to the Canadian Emergency Response Benefit (CERB) program to check eligibility. https://www.canada.ca/en/services/benefits/ei/cerb-application.html

What if I have one employee and the annual salary falls just below the $50,000 threshold?
While technically short of the total annual wage eligibility, the advice is to apply. The “rules” are fluid and may be adjusted in the future. There is no harm in applying.

I hired staff before the COVID-19 crises and they did not start, is he eligible for the CERB?
This situation is not covered under CEWS. We suggest to refer the person to CERB (see above). As written so far, he is not eligible for CERB, but as mentioned, the rules are fluid and subject to change.

Are professional corporations eligible for the CEBA?
YES.

What other eligibility requirements are there for the CEBA?
As with the CEWS, business require to have an annual payroll of $50,000 to $1,000,000 to be eligible for this load.

As a business owner not on the payroll can I receive the Canadian Emergency Response Benefit and the Wage Subsidy?
You cannot “double dip” into these programs. If you are on the business’s payroll, the CEWS applies. IF not, you should evaluate the CERB.

Rate: