On January 12, 2022, the Canadian government announced the CEBA (Canada Emergency Business Account) loan repayment extension. According to the government’s website, the the CEBA program has provided interest-free, partially forgivable loans of up to $60,000.00 to nearly 900,000 small businesses and not-for-profit organizations to help them through the pandemic.
CEBA Loan Repayment Extension – New Deadline
The original deadline for repayment was December 31, 2022. However, because of the Omicron variant, the government has extended this deadline to December 31, 2023. If that loan is paid back before or on this date, this would result in loan forgiveness of 33 per cent, or up to $20,000.
However if the loan is not fully paid back then outstanding loan would convert to a two-year term loan with an interest rate of five per cent per annum commencing on January 1, 2024, and the loan fully due by December 31, 2025.
The Minister of Finance Chrystia Freeland stated the reason for the change. She said: “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.”
Conclusion
The CEBA loan repayment extension is a relief for many businesses that are trying to stay afloat during the newest wave of coronavirus. Hopefully this extra time helps most businesses and not for profits to stay afloat. However, as we already know, coronavirus is very unpredictable and extremely resilient. So only time will tell if this new measure truly helps. Please stay safe.