CEBA Loan Repayment: How To Repay A CEBA Loan

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.

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.

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.

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.

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

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.

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

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.

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.

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.

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.

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.

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.

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.