24 Oct CEBA Repayment Deadline
The Canada Emergency Business Account (CEBA) program was initiated to provide financial assistance to small businesses and other entities adversely affected by the COVID pandemic. The CEBA program provided interest-free loans of up to $60,000 to eligible entities, with a portion of the loan (up to $20,000) forgivable if specific conditions were met. The CEBA program originally set a repayment deadline of December 31, 2022, which was subsequently extended to December 31, 2023.
On September 14, 2023, the Canadian government further extended the CEBA repayment deadline to January 18, 2024. If you repay by this date you should qualify for forgiveness. An additional extension to March 28, 2024, is available to entities that apply for refinancing with the financial institution that granted the CEBA loan by January 18, 2024, but require a grace period for the application to be processed.
An entity that borrowed $40,000 or less, only needs to repay 75% of the loan by January 18, 2024. For example, an entity that borrowed $40,000, would only need to repay $30,000 (75%x $40,000). Entities that borrowed more than $40,000, up to $60,000, only need to repay 75% on the first $40,000 plus 50% on the amount above $40,000. For example, an entity that borrowed $60,000, only needs to repay $40,000 ($30,000(75% x $40,000) + $10,000(50% x $20,000)).
If an entity applies for refinancing by January 18, 2024, with the financial institution that issued the loan, they should still qualify for the partial loan forgiveness as described above if they repay the loan and any outstanding interest by March 28, 2024.
If an entity can’t meet the January 18, 2024 loan forgiveness repayment deadline, the loan will automatically convert into a three-year term loan with 5% annual interest on January 19, 2024. This three-year term load must be fully paid by December 31, 2026 (previously December 31, 2025).
Plan ahead to determine whether you’re able to repay the loan, less the forgivable amount, by January 18, 2024. Otherwise, speak with your financial institution to consider refinancing options.