Ceba Loan Repayment: How To Repay A Ceba Loan

CEBA Loan Repayment: How To Repay A CEBA Loan

In a recent news release, it was announced that there would be a CEBA loan extension for repayment. The announcement was made by Deputy Prime Minister Chrystia Freeland and International Trade, Export Promotion, Small Business, and Economic Development minister Mary Ng.

These honourable members indicated that businesses that accessed the loan have a one-year extension to repay the amount owed.

Businesses that qualified for this COVID relief load in April 2020 were initially given until the end of 2022 to settle their debt. And businesses can repay their CEBA loans via BMO Bank, TD Bank, Scotiabank, CIBC, or RBC.

If you repay your CEBA loan on time, you’ll be eligible for up to $20,000 in loan forgiveness. Refinance your loan so you can pay on time and claim your benefit.

So, how do you repay the Canadian Emergency Business Account (CEBA) loan? And when is the deadline? Read on to learn about the CEBA program, the new repayment due date, and how to repay your loan balance.

What is CEBA?

The Canadian Emergency Business Account (CEBA) program was an initiative of Export Development Canada (EDC). Its primary function was to help Canadian small businesses financially during the COVID-19 pandemic.

Launched in April 2020, the CEBA loan amount was $40,000 but increased to $60,000 on December 4, 2020. The $20,000 increment was for businesses qualified for the initial loan limit.

Small businesses were to use the amount to cover non-deferrable expenses like rent, insurance, and payrolls. The CEBA program had a 25% loan forgiveness policy for the $40,000 loan and a 50% for the $20,000 increment.

So, if businesses made the CEBA loan repayment deadline on or before December 31, 2022, they would be eligible for the loan forgiveness policy. For example, if business X applied for $40,000 and repaid $30,000 by the deadline, the bank would mark the loan as paid.

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Let us take business Y, which borrowed $60,000 and repaid it before the due date. If the business repaid $40,000 by the end of the grace period, the bank would mark the loan as paid.

However, the terms will change if the two businesses fail to repay the loan minus the forgiven amount or have a balance by the due date. According to the loan repayment policies, their banking institutions will convert the loan balance into a two-year loan. The two firms will pay 5% annual interest on the loan balance plus the forgiveness amount.

When is CEBA loan repayment due?

When the EDC rolled out the CEBA program in April 2020, the initial repayment deadline was December 31, 2022. However, due to the economic crisis, many small businesses still need time to repay the loan.

So, the federal government took the initiative to postpone the due date. The end of the new grace period for the CEBA loan is December 31, 2023.

Note that the loan will convert from January 1, 2024, to a two-year term, and you will forfeit the forgiveness offered. The official deadline to repay the CEBA loan is December 31, 2025.

After this period, you will be personally liable as the business’ sole proprietor to repay the loan. However, if you cannot pay the loan on time, it would be best to contact the CEBA call center or your banking institution to plan a repayment solution.

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How to repay CEBA loan

Since the government had the CEBA loan repayment date extended to December 31, 2023, it is best to know how to repay your loan. Moreover, an early repayment guarantees loan forgiveness of up to $20,000, which sounds good for business.

You can repay the loan depending on the financial institution’s loan repayment methods: online banking or mobile transfer. Moreover, you can make these repayments whenever and at any rate.

The early repayment of the $40,000 principal loan amount attracts a 25% loan forgiveness. So you will have to pay $30,000, calculated as 25%×40,000.

The $60,000 loan amount attracts a $20,000 loan forgiveness, calculated as 25%×$40,000 +50%×20,000. In this loan package, you will pay $40,000.

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Here is how you can repay the loan through different verified financial institutions.

1. BMO Bank

The Bank of Montreal (BMO)  is one of the largest Canadian financial institutions offering CEBA loans. Like the other banks, BMO accepted loan applications from April 2020 to June 2021.

The loan policies remained the same as rolled out by the EDC, and the repayment deadline is December 31, 2023. So, how can you repay your CEBA loan balance through BMO?

The repayment method is easy. You must add the loan to your online banking account. You can transfer the amount you want to repay, which will reflect on your mini statement, reducing the loan balance.

2. TD Bank

Paying your CEBA loan amount via TD bank is easy since you can do it at the touch of a button. TD bank allows CEBA loan repayment through its online banking platform or its mobile application.

You can set up automatic monthly payments towards completing your loan balance. This action will allow a fixed repayment frequency to avoid rushing when the deadline closes.

The loan policies are like other banks, and you have up to December 31, 2023, to repay the loan in full. After the final deadline, you have up to December 31, 2025, to repay the loan balance, forgivable amount, and interest.

3. Scotiabank

You can make your CEBA loan repayment via Scotiabank’s online banking platform. Transfers towards offsetting the loan balance will appear under ScotiaLine for Business Visa.

You can repay the CEBA loan balance in whichever schedule you want to follow, provided you repay before the due date. The CEBA loan policies and repayment due date remain the same as in other banks.

Failure to repay on time will see the loan applicant forfeit the CEBA loan forgiveness incentive. They will have to repay the loan balance, 5% interest per year, and the forgivable amount.

4. CIBC

CEBA loan repayment is similar to other banking institutions. You can make repayments through your online banking account or via CIBC advisor in its banking sector.

CIBC has done a perfect job setting aside a section of its website to educate people about the CEBA loan. It has answered frequently asked questions, including whether the loan is taxable.

This financial institution makes it clear that the CEBA loan is not taxable, but the forgivable portion is. CIBC also makes it easy for business owners to access their loan balances on the online banking platform. The loan due date is December 31, 2023, and businesses must repay it fully by December 31, 2025.

5. RBC

Another certified institution where you can repay the CEBA loan is the Royal Bank of Canada. The repayments are simple since you can transfer the amount you want to pay from your online banking account.

You can also repay the loan through the bank’s physical branches, ATMs or RBC Express. The loan policy and repayment terms are like those of the other banks.

If you repay your CEBA loan balance before the due date, you are eligible for the loan forgiveness offered. Moreover, businesses have until December 31, 2023, to repay the loan.

Failure to do so warrants RBC converting the loan balance into a two-year term loan. This conversion means you must repay the loan balance, the forgivable portion, and 5% interest per year.

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CEBA repayment deadline conclusion

With the unforeseen COVID-19 pandemic, Canadian businesses suffered significantly. However, in partnership with banking institutions, the EDC offered liquidity by offering CEBA interest-free loans.

The economy is stabilizing, and many are wondering how to repay their CEBA loan balance. The above guide has highlighted all you need to know about this CEBA program and five institutions you can use to repay the loan.

It is up to you to make a wise loan repayment decision to enjoy the loan forgiveness incentive. Thanks for checking out the CEBA loan repayment deadlines. Keep an eye on this page for more CEBA loan news if you want CEBA updates today.

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FAQs about the CEBA repayment

How do I repay my CEBA loan?

You can repay your CEBA loan balance in various ways depending on your banking institution. Some banks allow CEBA loan repayments through online banking, mobile application, physical branch, and ATMs. So, it would be best to ask the bank for a definitive answer.

When is the CEBA Loan repayment due?

The CEBA loan is due on December 31, 2023. This is after the federal government issued a one-year expansion from December 31, 2022. Deadline. However, businesses that fail to pay by this date have until December 31, 2025.

Is the CEBA loan program application ongoing?

The CEBA loan application process ended on June 30, 2021. Businesses that applied by that deadline had up to July 14, 2021, to upload their supporting documents. If the bank needed more verification, firms had up to October 1, 2021, to present the documentation.

What is the CEBA loan’s interest rate?

The CEBA loan is interest-free, provided one pays by the end of the grace period, December 31, 2023. Failure to repay on or before this headline will attract a 5% per annum interest rate on the loan balance. Moreover, this rate is payable monthly until the loan closes.

How do I qualify for loan CEBA forgiveness?

Borrowers 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 December 31, 2023. Borrowers that qualified for the new extended term have been contacted by their financial institution with details regarding the new repayment date. Please contact your financial institution for instructions on how to make a payment towards your CEBA loan. CEBA eligibility criteria validations have been completed for all borrowers 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.

What are the terms of the forgiveness?

All applicants that meet CEBA eligibility criteria will 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 December 31, 2023 will result in loan forgiveness of 25 percent (up to $10,000). Example 1: Maximum Amount Borrowed: $40,000 Amount Repaid By December 31, 2023: $30,000 Available Forgiveness: $10,000 Example 2: Maximum Amount Borrowed: $20,000 Amount Repaid By December 31, 2023: $15,000 Available Forgiveness: $5,000 Example 3: Maximum Amount Borrowed: $40,000 Amount Repaid By December 31, 2023: $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 December 31, 2023 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 December 31, 2023. 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 December 31, 2023: $40,000 Available Forgiveness: $20,000 ($40,000 x 25% + $20,000 x 50%) Example 5: Maximum Amount Borrowed: $50,000 Amount Repaid By December 31, 2023: $35,000 Available Forgiveness: $15,000 ($40,000 x 25% + $10,000 x 50%) Example 6: Maximum Amount Borrowed: $60,000 Amount Repaid By December 31, 2023: $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 December 31, 2023 will result in loan forgiveness of 50 percent (up to $10,000). Example 7: Maximum amount Borrowed: $20,000 Amount Repaid By December 31, 2023: $10,000 Available Forgiveness: $10,000 Example 8: Maximum amount Borrowed: $20,000 Amount Repaid By December 31, 2023: $8,000 Available Forgiveness: $0

How do I calculate my CEBA loan forgiveness offer?

You can calculate your loan forgiveness amount through some simple calculations. For example, any amount below $40,000 accumulates a 25%×amount loan forgiveness offer. Meanwhile, an amount above $40,000 to $60,000 attracts a 25%×$40,000 +50%×amount forgiveness.

What are the repayment terms for the $40,000 and $60,000 loan and the $20,000 expansion?

All applicants that meet CEBA eligibility criteria will have the following repayment terms: Interest:

  • 0% per annum interest until December 31, 2023
  • 5% per annum interest starting on January 1, 2024; interest payment frequency to be determined by your financial institution
Repayments & Maturity:
  • No principal repayment is required before December 31, 2023
  • If the loan remains outstanding after December 31, 2023, only interest payments are required until the full principal is due on December 31, 2025
Debt Forgiveness:
  • If the outstanding principal, other than the amount of potential debt forgiveness, is repaid by December 31, 2023, the remaining principal amount will be forgiven, provided that no default under the loan has occurred

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 applicants that received funding through the CEBA program 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?

Borrowers that are not in good standing are in default on 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 the 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 borrowers that met CEBA eligibility criteria and are in good standing, if you do not repay your loan by December 31, 2023, you will not receive forgiveness. During the period of January 1, 2024, to December 31, 2025, you will be required to pay interest on your CEBA loan. For any additional information regarding interest applicable to your CEBA loan, please contact your financial institution.

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.

What are the eligibility requirements for CEBA?

The CEBA application process follows one of two streams: (i) the Payroll Stream (Applicants with employment income paid in the 2019 calendar year between Cdn.$20,000 and Cdn.$1,500,000) or (ii) the Non-Deferrable Expense Stream (Applicants with Cdn.$20,000 or less in total employment income paid in the 2019 calendar year). Every applicant must meet the following criteria:

  • Has an active CRA Business Number (BN) with an effective date of registration on or prior to March 1, 2020.
  • Has an active business chequing/operating account with the Lender at the time of applying for CEBA. Note: If Borrower currently does not have a business chequing/operating account the Borrower must create one at their primary financial institution before applying for CEBA.
  • Has not previously used the Canada Emergency Business Account Program (the “Program”) and will not apply for support under the Program at any other financial institution.
  • Intends to continue to operate its business or to resume operations.
If you fall into the Non-Deferrable Expenses Stream you must also meet the following criteria:
  • Have eligible non-deferrable expenses between Cdn. $40,000 and Cdn. $1,500,000. Eligible non-deferrable expenses could include costs such as rent, property taxes, utilities, and insurance. Expenses are subject to verification and audit by the Government of Canada.
  • Filed an income tax return with the CRA with a tax year ending in 2019 or, if its tax return for 2019 has not been submitted, 2018.

Was there a deadline for completing an application at my primary financial institution and for uploading supporting documents?

The June 30, 2021 deadline to complete an application has passed. Applicants who applied for CEBA prior to the June 30 application period deadline had until July 14, 2021 to submit supporting documents as part of their application, and until September 3, 2021 to resubmit documents if required.

Is a Canada Revenue Agency (CRA) Business Number required to apply?

Yes. A 9-digit CRA Business Number is required to apply. The business number must be active with an effective date on or prior to March 1, 2020. For payroll stream applicants, the 15-digit payroll account must be active with an effective date on or prior to March 1, 2020.

When is the CEBA loan due date?

When the EDC rolled out the CEBA program in April 2020, the initial repayment deadline was December 31, 2022. However, due to the economic crisis, many small businesses still need time to repay the loan. So, the federal government took the initiative to postpone the due date. The end of the new grace period for the CEBA loan is December 31, 2023. Note that the loan will convert from January 1, 2024, to a two-year term, and you will forfeit the forgiveness offered. The official deadline to repay the CEBA loan is December 31, 2025.

How to pay back a CEBA loan

You can pay back your CEBA loan through the financial institution that helped you borrow the funds.

Will CEBA be extended again?

It's not yet clear whether the CEBA will be extended again.

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March 4, 2023
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