Updated Repayment Terms for Canada Emergency Business Account (CEBA) Loans

As of September 14, 2023, the CEBA partial forgiveness repayment date has been extended to January 18, 2024, or until March 28, 2024, if the CEBA loan holder has submitted a refinancing application.

The Canada Emergency Business Account (CEBA) was a COVID support measure which offered interest-free, partially forgivable loans of up to $60,000 for small businesses and not-for-profit organizations. As the partial loan forgiveness repayment date, December 31, 2023, approaches, the Federal Government has introduced certain adjustments, including a minor extension to the partial loan forgiveness repayment date.

Prior to September 14, 2023, the repayment terms, irrespective of the loan amount or the date of disbursement were:

• Partial loan forgiveness, depending on the amount borrowed, would apply if repayment is made on or before December 31, 2023.
• Any balance not repaid by the December 31, 2023, deadline would be restructured into a two-year interest-only loan, with the full amount of the loan principal due on December 31, 2025.

Following the Federal Government announcement, the repayment terms that now apply, irrespective of the loan amount or the date of disbursement are:

• Partial loan forgiveness, depending on the amount borrowed, will apply if repayment is made on or before January 18, 2024.
• For CEBA loan holders who make a refinancing application with the financial institution that provided their CEBA loan prior to January 18, 2024, the repayment deadline to qualify for partial loan forgiveness now includes a refinancing extension until March 28, 2024.
• Effective January 19, 2024, outstanding loans, including those that are captured by the refinancing extension, will convert to three-year term loans, subject to interest of five percent per annum.
  • Loan holders taking advantage of the refinancing extension will need to make monthly interest payments.
  • This loan term change extends the loan repayment date by one year from December 31, 2025, to December 31, 2026.

Further details, including some examples highlighting the changes, can be found on this Government of Canada website. For inquiries regarding your CEBA loan balance and repayment details, contact the financial institution that provided the loan. For questions related to tax implications of the CEBA loan forgiveness or other business advisory, tax and accounting matters, reach out to a Bateman MacKay Business Advisor.