CEBA loan repayment pushed back to end of 2023
January 12, 2022, 12:17 pm
The federal government has delayed the repayment loan for CEBA loans to the end of 2023 from the end of 2022.
Loans of up to $60,000 were made to 900,000 businesses across the country. One third, up to $20,000, is forgiveable if the loans are repaid in full by the deadline, which was December 31 of this year but has been pushed back to December 31 of next year.
"This extension will support short-term economic recovery and offer greater repayment flexibility to small businesses and not-for-profit organizations, many of which are facing continued challenges due to the pandemic. Repayment on or before the new deadline of December 31, 2023, will result in loan forgiveness of up to a third of the value of the loans (meaning up to $20,000)," the government said in a statement Wednesday.
Outstanding loans would subsequently convert to two-year term loans with interest of 5 per cent per annum commencing on January 1, 2024, with the loans fully due by December 31, 2025.
“As Omicron has reminded us, we are still living in a pandemic. Our government understood, from the outset, that we had to put in place unprecedented measures to meet this unprecedented challenge. By providing small businesses with additional time to repay their loans and still have partial loan forgiveness, affected businesses and workers will continue to have the support they need to get through the pandemic,” Deputy Prime Minister Chrystia Freeland said.
The CEBA program was open for applications from April 9, 2020, to June 30, 2021. It has provided more than $49 billion in liquidity to over 898,000 Canadian businesses.
CEBA provides interest-free loans of up to $60,000 to small businesses to help cover their operating costs during a time where their revenues have been reduced. These loans are partially forgivable. With the extension announced today, repaying the balance of the loan on or before December 31, 2023, will result in loan forgiveness of up to 33 per cent (up to $20,000).