Many Canadian small businesses that took a hit during the pandemic benefited from the Canada Emergency Business Account (CEBA) interest-free loan in 2020/2021. The program was set up to provide relief to faltering businesses who needed help to stay afloat.
For those who still have an outstanding loan, we are pleased to inform you that the federal government has extended the repayment deadline from December 31, 2023, to January 18, 2024, in recognition of the busy end of the year for many businesses.
IMPORTANT: If your business has been informed that it is not eligible for loan forgiveness, your repayment deadline has not changed and will need to be paid in full by December 31, 2023, according to the Government of Canada website.
In order to qualify for partial loan forgiveness of up to 33 percent, you must repay the balance of the loan on or before January 18th, 2024. If you need more time, you need to make a refinancing application with the financial institution that provided your CEBA loan BEFORE the repayment deadline of January 18, 2024. You will then receive an extension until March 28, 2024, to repay the loan and still benefit from the partial loan forgiveness. CTV News has more details on this extension.
To put the savings into perspective: if you received a $40,000 CEBA loan, you need to pay off $30,000 in order to get the $10,000 of loan forgiveness. If you received a CEBA loan of $60,000, you need to pay off $40,000 in order to get the $20,000 of loan forgiveness.
All loans will start accruing 5% interest if they are not repaid on time.