The federal government has signalled that they will be extending the repayment deadline for the Canada Emergency Business Account loans!

In her speech yesterday, Deputy Prime Minister Chystia Freeland, said “The government will also bring forward legislation to extend small businesses’ deadline for the repayment of Canada Emergency Business Account loans…”

The CFA and its members have been actively lobbying for the extension over the past 6 months. 69 CFA members signed the CFA’s letter to Minister Freeland and Ng asking the federal government to extend the repayment deadline to qualify for the forgivable portion to December 31, 2023, and to extend the repayment terms and forgive all interest payments on all government-backed pandemic loans (CEBA, BCAP, HASCAP, RRRF, etc.) for SMEs.

About the CEBA Program

The CEBA program provides interest-free loans of up to $60,000 to small businesses and not-for-profits.

Repayment deadline for loan forgiveness

Under the current structure (which will be changing), if a business repays the balance of the loan on or before December 31, 2022, they will qualify for loan forgiveness of 33 percent (up to $20,000) of the value of the loan. For example, if a business took a CEBA loan of $40,000, repaid $30,000 before December 31, 2022 would receive loan forgiveness of $10,000.

If the balance of the loan is not fully repaid by December 31, 2022

If the balance of the CEBA loan was not repaid before December 31, 2022, then the business would not qualify for loan forgiveness. For example, a business that took a CEBA loan of $40,000 and only repaid $25,000 before December 31, 2022, would receive $0 in loan forgiveness. They would only have to pay interest on the principal at 5% per annum until December 31, 2025. The full amount of the CEBA loan must be repaid by December 31, 2025.

Changes that are coming

The federal government has signalled that they will be extending the repayment deadline to qualify for loan forgiveness. The extension date will be announced in the future.