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CEBA Loan Extension: Read The Fine Print

by | Sep 15, 2023 | Advisory

In yesterday’s announcement, the Canadian government introduced extended deadlines and added flexibilities for the Canada Emergency Business Account (CEBA) loan repayments. The CEBA Loan Extension is a move aimed at providing relief to small businesses and not-for-profit organizations in Canada. However, the devil is in the details. Here’s what you need to know:

Summary Points From The Extension Announcement

  • Extension of the repayment deadline – The date to qualify for partial loan forgiveness has been extended from December 31, 2023, to January 18, 2024. (That’s only a couple of weeks of extension!) An additional extension till March 28, 2024, is available for those who apply for refinancing by January 18, 2024.
  • Partial loan forgiveness – Loan holders can still benefit from up to 33% loan forgiveness if they adhere to the new deadlines.
  • Conversion to term loans – Outstanding loans as of January 19, 2024, will convert to three-year term loans with a 5% annual interest rate. The repayment date gets extended to December 31, 2026.
  • Relief for refinancing applicants – Those applying for refinancing have until March 28, 2024, to secure new financing and still qualify for partial loan forgiveness.
  • Loan Interest – This will stay as-is at 5% per year interest rate.

To help you better understand the changes, here are some hypothetical scenarios:

  • Scenario 1: Alex owns a small cafe and has a $60,000 CEBA loan. Despite her best efforts, she can’t repay the full amount by the initial deadline. Thankfully, she can now benefit from a $20,000 loan forgiveness if she manages to repay or refinance the loan by March 28, 2024.
  • Scenario 2: Chris and Pat own an e-commerce business. They have a $40,000 CEBA loan but are unable to repay it fully by January 18, 2024. The loan will convert to a three-year term loan with a 5% annual interest, allowing them to make smaller monthly payments of around $167 and defer the principal payment until December 31, 2026.
  • Scenario 3: Taylor applied for refinancing to pay off a $60,000 CEBA loan. Although they couldn’t get a response from their bank by January 18, 2024, the new extension gives them until March 28, 2024, to secure new financing and enjoy a $20,000 loan forgiveness.

Most Important Takeaway

You want to avail the forgivable amount? Repay the loan, less forgivable amount, by Jan 18, 2024. As a second option, submit a refinancing application with a financial institution by that date, and repay by March 28, 2024.


We urge our small business clients to avail the forgivable amount and repay the loan sooner than later. Still got questions? Reach out to our team!

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