What to know ahead of the 2023 CEBA repayment deadline
What to know ahead of the 2023 CEBA repayment deadline
Businesses that received a Canada Emergency Business Account loan between April 2020 and June 2021 now have until either December 31, 2023 or January 18, 2024, to repay the balance in full and qualify for partial loan forgiveness.
Loans that are not repaid by these deadlines and do not qualify for further repayment extensions will be converted to a term loan, subject to interest at five percent per annum. These loans must be repaid in full by December 31, 2026.
See below for full details on the key deadlines, interest-free grace period, loan forgiveness, and what to do if you cannot repay your CEBA loan by the due date.
The federal government introduced the Canada Emergency Business Account (CEBA) in April 2020 as part of its COVID-19 emergency response measures. The program provided interest-free loans of up to $60,000 for qualifying small businesses and non-profit organizations to offset the impacts of business closures and restrictions related to the pandemic.
Partial loan forgiveness is available to certain CEBA loan holders if the loan is repaid by a specific deadline (more details below). More than 900,000 organizations accessed CEBA loans over the program’s lifetime through June 30, 2021.
In September 2023, the federal government announced several changes to the CEBA program to extend repayment and partial loan forgiveness deadlines.
Following are details on the updated deadlines and other resources to help you ahead of — and beyond — the repayment deadline.
When is the CEBA loan due?
There are some key dates that CEBA loan holders should be aware of:
- December 31, 2023: Deadline for full loan repayment for businesses not eligible for loan forgiveness (as previously informed by lenders). The January 18, 2024, extension below will not apply to you.
- January 18, 2024: Deadline for repayment to qualify for the interest-free grace period and partial loan forgiveness — or to apply to refinance the loan for the March 28, 2024 extension (see below). Financial institutions will contact loan holders in the coming months to confirm eligibility for this repayment extension.
- March 28, 2024: Deadline for repayment to qualify for partial loan forgiveness for eligible borrowers who applied to refinance the loan by January 18, 2024. Repayment of the loan (less the potential forgiven amount) and interest in full by this date will qualify for partial loan forgiveness (up to 33 percent to a maximum of $20,000).
- December 31, 2026: Final repayment deadline for all outstanding CEBA loans and applicable interest (The term loans are subject to interest of 5 percent per annum. Interest payment frequency may vary by financial institution.)
Full details are available on the Government of Canada’s CEBA page.
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How do I pay back the CEBA loan?
Please contact the financial institution that issued the loan for instructions on how to make a payment towards your CEBA loan.
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What should I do if I can’t repay the loan?
Some industries have not fully recovered from the pandemic, and many businesses and non-profit organizations are struggling with increased costs due to inflation and higher interest rates.
Consult your Business Advisor as early as possible to discuss options to free up capital in your organization to repay the outstanding balance (less the forgivable amount) or evaluate the merits of submitting a loan restructuring application ahead of the January 18, 2024, deadline if you are eligible.
To help manage ongoing cash flow challenges, your Business Advisor can also suggest restructuring options to offload unprofitable assets and/or entities or available government incentive programs for you to consider.
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