Man who missed the deadline for the CEBA loan.

CEBA loan: What happens if you don’t repay it by December 31, 2026?

Do you still have a balance on your CEBA Loan to pay back? The December 31, 2026 deadline is approaching. If you think you’ll struggle to repay the loan before this date, this is a good time to explore what could happen and, most importantly, what you can do now.

In short

December 31, 2026 is the deadline for repaying your CEBA Loan. You should bear in mind that:

  • an interest rate of 5% applies to the loan balance now;
  • the total amount must be paid off before the deadline;
  • if you have an outstanding balance, debt recovery measures may be taken;
  • several solutions such as refinancing, debt consolidation or a consumer proposal can reduce the pressure.

The most important step is taking action quickly. The earlier you take charge, the more options you’ll have to improve your situation.

What has changed since 2024

As of January 19, 2024, organizations that were unable to repay their CEBA Loan before the deadline no longer qualified for partial loan forgiveness under the program.

In concrete terms, this means that:

  • the loan is converted to a regular term loan;
  • an annual interest rate of 5% applies to the balance;
  • you must repay the total amount by December 31, 2026.

For several entrepreneurs, this is very stressful. However, there is good news. There are solutions to regain control of your finances.

What happens if I don’t pay off the loan before December 31, 2026?

If you have an unpaid balance after this deadline, you could face several consequences.

Repayment of the full balance could be required immediately

Your financial institution would have the right to demand immediate repayment of the total loan amount. When you’re already short on liquidity, absorbing this cost could be difficult.

A debt collection process could be put in motion

The debt could be transferred to the federal government, which would then take measures to recover the amounts owed.

Your organization’s financial health could be weakened

The longer you take to repay a debt, the more the repercussions will affect you. The most common impacts are:

  • a cash shortfall;
  • difficulty in securing financing;
  • falling behind on your repayments;
  • increasing financial stress;
  • a risk of insolvency.

As you can see, it’s best to take action before the situation becomes unmanageable.

What are your options if you still have a balance owing on your CEBA Loan?

Pay it off as soon as possible

You can repay your loan at any time without penalty.

If you have enough liquidity, this is the simplest option. You’ll reduce the amount of interest due and quickly improve your organization’s financial health.

Consider refinancing

Your financial institution may suggest spreading out your payments or adapting the conditions to your current situation. Before proceeding, take time to evaluate the impact of this new payment on your liquidity and confirm whether collateral is required.

Combine your debts (consolidation)

If you have several financial commitments, debt consolidation could make your life easier. This involves combining your debts into one monthly payment to reduce the financial pressure and make budget management easier.

File a proposal to creditors

A proposal allows you to reach an agreement with your creditors to reduce the amount to be reimbursed or negotiate extended payments. This is a tangible way to avoid bankruptcy while continuing your business activities.

Consider commercial bankruptcy

Commercial bankruptcy is always a last resort solution, but it can sometimes be the only way out. It allows you to cease your company’s operations and make a fresh start. Only a Licensed Insolvency Trustee can support you through this process. Our experts are there to guide you, without judgment.

Warning signs to look out for

Certain signs indicate that the situation is starting to deteriorate. It’s best to raise a red flag early on if:

  • you regularly lack liquidity;
  • you’re struggling to meet your financial obligations each month;
  • your debts are piling up;
  • the financial stress is building.

If one or more of these situations apply to you, it’s time to speak to a professional.

How to best prepare for the December 31, 2026 deadline

This deadline may seem a long way away, but the best decisions are made when time is on your side. The following simple actions can make a significant difference.

  • Track your cashflow regularly.
  • Review your financial obligations.
  • Cut non-essential expenses.
  • Don’t delay contacting your creditors if you anticipate difficulties.

Consult a professional when you spot the first warning signs.

If you were unable to repay your CEBA Loan, don’t keep your worries to yourself. Call on one of our Licensed Insolvency Trustees. The first consultation is free, confidential and judgment-free.

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