Short answer: if you run your business as a sole proprietor or partner, your CEBA loan is your personal debt, due in full on December 31, 2026. You can still refinance it, but some online lenders only lend to incorporated businesses, so check eligibility before you apply.
Why it matters that you are not incorporated
A corporation is a separate legal person, so its CEBA loan is the corporation’s debt. A sole proprietorship is not. If the loan goes unpaid, collection can reach you personally, and closing the business does not end the debt. See is the CEBA loan personally guaranteed?
Your refinancing options
- Your own bank or credit union. It already knows your account history. Ask about a business term loan, or a personal line of credit or home equity line of credit if you own property. Personal secured borrowing is often cheaper than unsecured business loans, but it puts your home on the line.
- Online business lenders. Many fund in days rather than weeks, but requirements vary. Some, such as Journey Capital, list incorporation as a requirement. Others look mainly at time in business, revenue and credit. Compare CEBA refinancing lenders.
- Paying part now. Repaying some principal before the deadline reduces both interest and what could go to collections.
What lenders will ask for
- Several months of business bank statements
- Your recent personal tax returns, including Form T2125 (Statement of Business or Professional Activities)
- Your CEBA payoff amount. See how to get your CEBA payoff statement.
- Consent to a credit check. As a sole proprietor, your personal credit carries more weight.
If you cannot refinance
Talk to your financial institution before the deadline. After the deadline, an unpaid loan is likely to be assigned to the CRA, which can set up a payment arrangement; see CEBA payment plans with the CRA. Because a sole proprietor’s CEBA loan is a personal unsecured debt, it can be included in a consumer proposal or personal bankruptcy. A Licensed Insolvency Trustee can explain whether that makes sense for you. See can you settle a CEBA loan for less?
Sources
- Hoyes, Michalos and Associates, What happens if you can’t pay your CEBA loan
- Finder, Journey Capital review
- Department of Finance Canada, CEBA briefing materials
This article is general information, not financial or legal advice. ceba.ca is an independent website and is not affiliated with the Government of Canada or any financial institution.