Deadline for CEBA pandemic loan repayment is Thursday. Here’s what you need to know
This Thursday is a significant date for many Canadian businesses who received assistance from the federal government at the height of the pandemic.
Businesses that were eligible to receive a Canada Emergency Business Account loan have until Jan. 18 to repay the money, interest-free, and receive loan forgiveness for up to a third of the cost.
The CEBA program, which ran from April 2020 to June 2021, provided small businesses and non-profit organizations interest-free loans of up to $60,000 to help them cover operating costs.
Although the federal government has extended the repayment deadline in the past, it says the dates it’s giving now are final.
“We are now far enough from the pandemic that we do have to wrap up pandemic programs,” Prime Minister Justin Trudeau said at a press conference Wednesday morning.
Here’s what you need to know.
Who is eligible for CEBA loan forgiveness?
If an eligible business meets the Thursday deadline — an extension of the original Dec. 31, 2022 deadline — they can expect to receive loan forgiveness of up to $10,000 for a $40,000 loan and up to $20,000 for a $60,000 loan.
Those who borrowed $40,000 or less will be forgiven 25 per cent of their loan amount. Those who borrowed more, will be forgiven 25 per cent of the first $40,000 and 50 per cent of the rest.
Those who can’t repay the money by Thursday but already applied for refinancing with the bank that provided their CEBA loan before Thursday, are also eligible for forgiveness.
The federal government is providing a refinancing grace period so they have time to secure the refinancing and repay the rest of the loan by March 28 of this year.
What happens if a business doesn’t repay the CEBA loan by Thursday?
Businesses that haven’t repaid the CEBA loan by Thursday, and are not able to refinance, will begin accruing five per cent annual interest, and will not be eligible for loan forgiveness.
They will have to repay the loan in full, with the low interest, by Dec. 31, 2026 — an extension from the previous Dec. 31, 2025 deadline.
What if a business was not eligible for a CEBA loan but received one?
While nearly 900,000 businesses were approved for CEBA loans, more than 50,000 recipients were later found to be ineligible, with many reporting that they only found out around the end of 2023, the CBC reported.
Those who were ineligible to receive CEBA will not receive loan forgiveness, even if they repay the money by the designated deadline, however, they will not be penalized for taking the loan in the first place, the national broadcaster reported.
This article was reported by The Star
