Everything You Need to Know About Canada Emergency Business Account (CEBA) loans

Did you receive a CEBA loan? Did you know that you now have until the end of the year to pay it back? Or were you deemed not to meet the eligibility criteria for the full amount or for the $20,000 expansion? Here’s everything you need to know to manage your situation properly!

In short

Loan repayment deadline postponed to December 31, 2023.

There are two types of ineligibility notices :

  • Notice of complete ineligibility : you will lose the forgivable portion of the loan and must repay the full amount by December 31, 2023 ;
  • Notice of ineligibility for the $20,000 expansion : you retain the initial $40,000 loan and a portion becomes forgivable if you repay the loan by the end of 2023.

If you are unable to repay your loan :

  • Contact your financial institution or the CEBA Call Centre ;
  • Call on an expert to see of a proposal or bankruptcy are options you could consider.

Loan repayment extension

During the pandemic, you received a Canada Emergency Business Account (CEBA) loan. Good news, in October 2022, the Canada Revenue Agency announced it was extending the loan repayment deadline to December 31, 2023. However, you have less than a year to repay the loan without interest.

Notice of ineligibility

There are two types of notices of ineligibility :

1. Complete ineligibility :

Your loan overall has been considered ineligible. You likely received a notice from your financial institution explaining that :

– the amount available to be forgiven is no longer forgivable ;

– you have to repay the full amount of your loan(s) by December 31, 2023.

2. Notice of ineligibility for the $20,000 expansion :

You received a notice that you are not eligible for the $20,000 expansion, this means your total loan is $60,000 and :

  • You retain the initial $40,000 loan ;
  • A portion of loan will be forgivable if you repay the loan by the end of 2023.

Some advice to manage the loan repayment

We recommend that you prepare financial forecasts. This will allow you to assess your ability to repay this debt along with all your other obligations.

Potential solutions if you cannot repay the loan

Once you’ve prepared your financial forecasts, if you realize you won’t be able to repay your CEBA loan, here is what you can do :

  • Contact your financial institution or the CEBA Call Centre. Explain your situation and see what solutions they suggest ;
  • One debt solution, the proposal, could help you discharge your debts, including this loan. A proposal suspends your creditors’ recourse so you can reach a debt repayment agreement with them based on your business’s ability to pay. There are numerous benefits to a proposal, including :

– No debt limit ;

– Possibility of cancelling commercial eases ;

– Possibility of obtaining bridge financing.

  • Bankruptcy may be a last resort option. Don’t hesitate to contact a Licensed Insolvency Trustee like those at Raymond Chabot who can help you find the best solution and support you at every step.

Questions?

Do you have questions about the CEBA loan?

Call the CEBA Call Centre at 1-888-324-4201.

(Monday-Friday, 9AM to 6PM)

Have the following on hand :

  • Your 9-digit CRA business number ;
  • Your T1, T2 or T4SUM form used in your application.

If you do not have the tax form you used in your application and you applied through the Non-Deferrable Expense stream, please have the documents you uploaded readily available.

Is your SME experiencing financial difficulties and you can’t see your way out? Book an appointment with one of our recovery and reorganization experts. They will help you find solutions. It’s confidential, judgment-free and the first meeting is free.

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