The repayment deadline to receive forgiveness on a portion of the CEBA loan has been extended from December 31, 2022, to December 31, 2023, and HASCAP applications are now available until March 31, 2022.
The CEBA program provides interest-free, partially forgivable loans of up to $60,000 for small businesses and not-for-profit organizations. These loans were available for application on April 6th, 2020, and, following a program update that included an extension and maximum loan amount increase, closed on June 30, 2021.
Originally, up to 33% of the loan would be forgiven (and represent taxable income of the business) if the loan balance was repaid on or before December 31, 2022. Due to the prolonged nature of the pandemic, the Federal Government announced an extension to this repayment date until December 31, 2023, for all eligible borrowers in good standing. On January 1, 2024, any outstanding loans will convert to two-year term loans with an annual interest rate of 5%, with the loans fully due by December 31, 2025.
The application period for HASCAP loans has been extended until March 31, 2022. This program provides guaranteed, low-interest loans to cover operational cash flow needs of small and medium-sized Canadian businesses and can be applied for through the businesses existing financial institution. For more details on HASCAP loans, visit this BDC website.
If you have any questions about the CEBA repayment extension, how the loan forgiveness will impact your taxable income, HASCAP, or questions about any other COVID-19 support programs, please contact a Bateman MacKay Business Advisor. Follow Bateman MacKay on LinkedIn and subscribe to our blog to receive the most up to date information on Canadian tax and accounting issues and COVID-19 support updates for businesses.
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