CEBA Loan Repayment Explained

CEBA loan holders' repayment deadline is January 18, 2024, to attain partial loan forgiveness of up to $20,000 (i.e. about 1/3 of the total loan). Anticipate and plan for repayment as further extensions are unlikely.

For those seeking to borrow for repayment, applying for a refinancing loan before January 18, 2024, is essential. This will qualify businesses for a special extension until March 28, 2024. Each bank is allowed to develop its process for refinancing applications so you will need to check with your financial institution regarding the application procedures.

Key refinancing extension considerations:

-      No standardized documentation is required to prove the refinancing application by January 18, 2024.

-      Even if applying for refinancing, alternative funding sources can still be explored.

-      Rejection for refinancing will still qualify for the extension until March 28, 2024, if the account is in good standing.

-      During the extension, a 5% interest rate will be charged.

For those unable to repay or borrow by January 18, 2024:

-      Loss of the forgivable portion is inevitable.

-      Repayment of the balance over 3 years (until the end of 2026) is an option at 5% interest.

-      Monthly interest payments are required, and the principal amount can be paid just before the term loan repayment deadline of December 31, 2026.

Disclaimer: Please note that the information mentioned in this article are subject to change at the discretion of the Canada Revenue Agency (CRA).

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