The Government recently extended the deadlines for repayment of outstanding Canada Emergency Business Account loans. These loans were made available to businesses to help them to continue operating during the COVID-19 pandemic.
The maximum loan available was $60,000 and the loans were partially forgivable (up to 1/3 of the loan amount advanced) provided that the non-forgivable portion was repaid by a certain deadline. The original deadline was December 31, 2022; this has now been extended to January 18, 2024. The deadline is extended further, to March 28, 2024, if the business applies for refinancing in order to repay the non-forgivable portion by that date.
If the non-forgivable portion is not paid by the deadline, the forgivable element is lost, and the full amount still outstanding is automatically converted to a 3-year term loan, with interest charged at a rate of 5%. Therefore, the deadline for full repayment of the loan is now December 31, 2026.
There is expected to be a high demand for refinancing between now and March 2024 in order for businesses to ensure they benefit from the forgivable amount (which could be as much as $20,000). Therefore, anyone wishing to pursue this option should contact their original CEBA lender as soon as possible to start their application.
Various business organizations continue to call for further extensions to the above deadlines, so anyone affected should keep up to date with news reports on the matter.