Written by: Mathew Lam
The Canada Emergency Business Account (“CEBA”) loan was introduced in April 2020 to provide eligible businesses affected by COVID-19 with a form of financial relief. Approved loans under the CEBA program qualified for partial loan forgiveness (up to $20,000) if the minimum balance repayment was made on or before December 31, 2022.
The Department of Finance Canada has recently announced that the repayment deadline for the CEBA loan has been extended from December 31, 2022, to December 31, 2023, for all eligible borrowers in good standing. If the minimum repayment amount is not made by December 31, 2023, no amount is forgiven and the outstanding balance is converted to a two-year term loan with an interest rate of 5% per annum, starting January 1, 2024. The interest is payable monthly on the last day of each month, with the full-term loan due by December 31, 2025.
It was also announced that any CEBA-equivalent borrowings received through the Regional Relief and Recovery Fund, will also have its repayment deadline extended to December 31, 2023, to qualify for partial forgiveness.
The additional 12 months is intended to provide business owners with some flexibility given the new restrictions encountered due to the Omicron variant.
Please reach out to your F+C representative with any inquiries.