CEBA – loan repayment & forgiveness
https://ceba-cuec.ca/ceba-faq/
Canada Emergency Business Account (CEBA)
General
No, the CEBA program is not affiliated with CEBA.ca or any other website.
Loan Repayment and Forgiveness
On September 14, 2023, the Government of Canada announced a one-year extension of the final loan maturity date – from December 31, 2025 to December 31, 2026 – subject to an interest rate of 5% per annum for CEBA loan holders in good standing.
Am I eligible for the January 18, 2024 repayment deadline to qualify for partial loan forgiveness?
Loan holders that met CEBA eligibility criteria and are in good standing are eligible for the January 18, 2024, repayment deadline to qualify for partial loan forgiveness. Loan holders that were contacted by their financial institution in late 2022 informing them that they qualify for a repayment deadline of December 31, 2023, to qualify for partial loan forgiveness will now benefit from an extended repayment deadline of January 18, 2024, to qualify for partial loan forgiveness. Loan holders will be contacted in the coming months by their financial institution to confirm their eligibility for the January 18, 2024, repayment deadline to qualify for partial loan forgiveness.
CEBA eligibility criteria validations have been completed for all loan holders and the results of these validations are final. These validations were conducted in partnership with the Canada Revenue Agency (CRA) and revalidated periodically since the launch of CEBA in April 2020 to ensure an accurate reflection of the information in CRA records.
If you are an eligible loan holder in good standing and you apply to refinance your CEBA loan at the same financial institution that originally provided your CEBA loan on or before January 18, 2024, you can qualify for partial loan forgiveness if the outstanding principal of your CEBA loan, other than the amount available to be forgiven, is repaid on or before March 28, 2024. This does not prevent you from also applying for refinancing with other lenders—as long as you applied for refinancing at the same financial institution that originally provided your CEBA loan and your CEBA loan is repaid by March 28, 2024, you can qualify for partial loan forgiveness.
To submit a refinancing application, please contact the financial institution that provided your CEBA loan for more details on the refinancing options available to you and their application processes. In order to provide you with flexibility to find the most suitable refinancing solution for your situation, the CEBA Program does not limit the loan type or terms that qualify as a refinancing application. As such, a range of potential refinancing solutions may be offered by your financial institution, including applying for or requesting new credit or making or requesting changes to an existing credit facility for the purpose of repaying your CEBA loan. Refinancing products provided by financial institutions are conventional loans between you and your financial institution. They are underwritten using the standard lending practices of your financial institution and are not affiliated with the CEBA Program or the Government of Canada.
Please note that if your CEBA loan is outstanding on January 19, 2024, interest at a rate of 5% per annum will commence, even if you applied for refinancing on or before January 18, 2024 and are waiting for your refinancing application to be reviewed or the proceeds of an approved refinancing loan to be funded or applied to your CEBA loan balance.
If you are considering applying for refinancing, don’t leave it to the last minute. Financial institutions are likely to receive a large volume of CEBA refinancing applications. Make sure you apply on or before January 18, 2024.
Please contact your financial institution for instructions on how to make a payment towards your CEBA loan.
What are the repayment terms for the $40,000 and $60,000 loan and the $20,000 expansion?
Eligible CEBA loan holders in good standing have the following repayment terms:
Interest:
- 0% per annum interest until January 18, 2024
- 5% per annum interest starting on January 19, 2024; interest payment frequency may vary by financial institution
Repayments & Maturity:
- No principal repayment required before January 18, 2024; if loan remains outstanding on January 19, 2024, it will convert to a non-amortizing term loan with full principal repayment due on December 31, 2026
Debt Forgiveness:
- If the outstanding principal, other than the amount of potential debt forgiveness, is repaid by January 18, 2024, the remaining principal amount will be forgiven
- If you have submitted a refinancing loan application to the financial institution that provided your CEBA loan by January 18, 2024 but require a grace period in order to finalize the payout of your CEBA loan, you can still qualify for partial loan forgiveness if the outstanding principal of your CEBA loan, other than the amount of potential debt forgiveness, is repaid by March 28, 2024
What are the terms of the forgiveness?
Eligible CEBA loan holders in good standing have the following terms of forgiveness:
If you borrowed $40,000 or less:
Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before January 18, 2024 will result in loan forgiveness of 25 percent (up to $10,000).
Example 1:
Maximum Amount Borrowed: $40,000
Amount Repaid By January 18, 2024: $30,000
Available Forgiveness: $10,000
Example 2:
Maximum Amount Borrowed: $20,000
Amount Repaid By January 18, 2024: $15,000
Available Forgiveness: $5,000
Example 3:
Maximum Amount Borrowed: $40,000
Amount Repaid By January 18, 2024: $25,000
Available Forgiveness: $0
If you borrowed more than $40,000 and up to $60,000:
If you received a $40,000 loan and subsequently received the $20,000 expansion, the terms of your forgiveness have changed and are described here.
Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before January 18, 2024 will result in a single tranche of loan forgiveness up to $20,000 based on a blended rate:
- 25 percent on the first $40,000; plus
- 50 percent on amounts above $40,000 and up to $60,000.
For clarity, the portion of forgiveness based on a rate of 25% and the portion of forgiveness based on a rate of 50% are combined into a single tranche of forgiveness, which is only available if all other amounts outstanding are repaid by January 18, 2024. For example, if $60,000 is borrowed, no forgiveness is available unless $40,000 is repaid.
Note: some financial institutions may record your $40,000 loan and $20,000 expansion as two separate loans. For the purposes of loan forgiveness, borrowings and repayments on both loans will be aggregated.
Example 4:
Maximum Amount Borrowed: $60,000
Amount Repaid By January 18, 2024: $40,000
Available Forgiveness: $20,000 ($40,000 x 25% + $20,000 x 50%)
Example 5:
Maximum Amount Borrowed: $50,000
Amount Repaid By January 18, 2024: $35,000
Available Forgiveness: $15,000 ($40,000 x 25% + $10,000 x 50%)
Example 6:
Maximum Amount Borrowed: $60,000
Amount Repaid By January 18, 2024: $35,000
Available Forgiveness: $0
If you fully repaid your original $40,000 loan, claimed forgiveness, and thereafter received the $20,000 expansion:
Repaying the outstanding balance of the $20,000 expansion (other than the amount available to be forgiven) on or before January 18, 2024 will result in loan forgiveness of 50 percent (up to $10,000).
Example 7:
Maximum amount Borrowed: $20,000
Amount Repaid By January 18, 2024: $10,000
Available Forgiveness: $10,000
Example 8:
Maximum amount Borrowed: $20,000
Amount Repaid By January 18, 2024: $8,000
Available Forgiveness: $0
Who can I contact if I have questions about my repayment requirements?
For questions about your specific loan details (i.e., the loan balance, outstanding amount that must be repaid, acceptable methods of repayment, and terms of the loan) please contact your financial institution.
For questions regarding eligibility for the CEBA program and the final status of CEBA loan applications (i.e., final loan statuses, reasons for failed applications, and application history) you may call the CEBA Call Centre at 1-888-324-4201. The CEBA Call Centre is available Monday to Friday from 9AM to 6PM Eastern Standard Time, excluding statutory holidays.
How do I qualify for loan forgiveness?
Loan holders that met CEBA eligibility criteria and are in good standing are eligible to receive forgiveness if the outstanding balance of the loan (other than the amount available to be forgiven) is repaid on or before January 18, 2024. Loan holders that were contacted by their financial institution in late 2022 informing them that they qualify for a repayment deadline of December 31, 2023, to qualify for partial loan forgiveness will now benefit from an extended repayment deadline of January 18, 2024, to qualify for partial loan forgiveness. Loan holders will be contacted in the coming months by their financial institution to confirm their eligibility for the January 18, 2024, repayment deadline to qualify for partial loan forgiveness.
If you have submitted a refinancing loan application to the financial institution that provided your CEBA loan by January 18, 2024 but require a grace period in order to finalize the payout of your CEBA loan, you can still qualify for partial loan forgiveness if the outstanding principal of your CEBA loan, other than the amount of potential debt forgiveness, is repaid by March 28, 2024.
For instructions on how to make a payment towards your CEBA loan, please contact your financial institution.
CEBA eligibility criteria validations have been completed for all loan holders and the results of these validations are final. These validations were conducted in partnership with the Canada Revenue Agency (CRA) and revalidated periodically since the launch of CEBA in April 2020 to ensure an accurate reflection of the information in CRA records.
CEBA eligibility was determined based on the criteria established by the Government of Canada. No organization involved in administering the CEBA program has the authority to grant exceptions to these criteria, including your financial institution.
No, the extension of the repayment deadline to qualify for forgiveness to January 18, 2024, does not apply to loan holders that are not eligible for forgiveness. If your business has been informed that it is not eligible for loan forgiveness and is required to repay its CEBA loan in full by December 31, 2023, your repayment deadline has not changed.
How can I determine the balance of my loan?
Please contact your financial institution for details regarding the balance of your CEBA loan.
How much of my CEBA loan do I have to repay?
Please refer to the repayment terms that you have received from your financial institution for details regarding your CEBA loan and associated forgiveness information. For any additional repayment information, please contact your financial institution.
If I am about to close my business, do I still have to repay my CEBA loan?
Yes, all CEBA loan holders are required to repay their loan in accordance with the repayment terms of their respective loans. Please refer to the repayment terms provided to you by your financial institution for details regarding your repayment deadline and forgiveness of the loan. For all questions pertaining to the details of your loan (i.e., the loan balance, process for repayment, or other loan account details), please contact your financial institution.
What happens if I cannot repay my loan by the deadline provided in my repayment terms?
Loan holders that are not in good standing are in default of their CEBA loan. If this situation applies to you and you do not repay your loan by the deadline provided in the repayment terms provided by your financial institution, you will be contacted by your financial institution regarding next steps. Additionally, depending on the reason that your loan is not in good standing, you may not be entitled to receive loan forgiveness.
For loan holders that met CEBA eligibility criteria and are in good standing, if you do not repay your loan by January 18, 2024, your CEBA loan will convert to a term loan with full principal repayment due on December 31, 2026. During the period of January 19, 2024, to December 31, 2026, interest at a rate of 5% per annum will apply to the outstanding balance of your CEBA loan. For any additional information regarding interest applicable to your CEBA loan, please contact your financial institution.
What are the repayment terms if my business becomes insolvent or goes bankrupt?
Please contact your financial institution for further details on repayment and other loan terms.
What are the repayment terms if the owner of the business is now deceased?
Please contact your financial institution for further details on repayment and other loan terms.
How do I repay my CEBA loan if the ownership of my business has changed?
The impact of a change in ownership of the Loan Holder on the repayment terms depends on the legal structure of the Loan Holder’s business (i.e., whether the business is a sole proprietor or a corporation). Please contact your financial institution for further details on repayment and other loan terms.
Does CEBA loan forgiveness need to be reported in my income tax filing? If so, when?
The forgiveness portion of your CEBA loan is taxable. For any other taxation questions relating to your CEBA loan, please contact the Canada Revenue Agency (CRA) or your accountant for further information.
Can I raise a dispute to change my repayment terms?
No. The CEBA Program is no longer providing a review, assessment or re-determination of a CEBA Loan Holder’s eligibility status, final outcome, or repayment term. As the application and funding periods for the CEBA Program have now closed, the opportunity for further resolution has now passed and applications will not be reconsidered by the CEBA Program.
Loan Details
I repaid my CEBA loan. Am I able to re-borrow amounts previously repaid?
No. CEBA loan repayments are final, and any amounts repaid cannot be re-borrowed.
If your CEBA loan was initially structured as a revolving line of credit, the deadline to drawdown on your CEBA loan was January 20, 2022. After this date, no further drawdowns are permitted, and any amounts repaid are not available to be re-borrowed.