Are you confused about the CEBA deadlines? Be it CEBA repayment deadline or CEBA partial loan forgiveness deadline, the terms are different. But still, there are people who get confused. And with the revised dates, things have become more messed up for everyone to understand.
In this blog, we will cover all the recent dates of the CEBA loan that you should remember. We bet that after reading this, you will remember CEBA dates at your fingertips. So, let’s start!
Recap of the CEBA Repayment and Partial Forgiveness Deadlines (Updated October 2023)
January 18, 2024
January 2024 is the first CEBA date to watch. There are three deadlines on this date:
- Partial loan forgiveness deadline (no refinancing application): Loan forgiveness deadline for businesses that have not applied for a CEBA refinancing loan with their financial institution (the financial institution that holds the CEBA loan). If you have not applied for CEBA refinancing, and haven’t repaid your CEBA loan, this is the last day to pay back the loan in order to qualify for up to $20,000 in government loan forgiveness.
- Loan refinancing application deadline: January 18, 2024 is also the last day to apply for CEBA refinance loan with your financial institution if you’re looking to extend the forgiveness deadline to March 28, 2024. If you apply for a loan with the bank or credit union that holds your CEBA loan before January 18, 2024, and then repay your CEBA loan before March 28, 2024, you will still qualify for government forgiveness.
- Interest-free period ends: As of January 19, 2024 interest will begin to accrue on all outstanding loans. Monthly interest payments will now be due. The payment for a $60,000 CEBA loan will be $250.00 per month. For this deadline, it does not matter if you’ve applied for a CEBA refinancing loan with your financial institution or not – interest payments will commence after January 18, 2024.
March 28, 2024
March 28, 2024 is the last deadline for receiving partial forgiveness on the CEBA loan from the federal government. This deadline only applies if you have applied for a CEBA refinancing loan with your primary financial institution.
It does not matter if your financial institution actually offers you this financing or declines your financing application. Nor does it matter if the financial institution informs you on January 19 or in March 2024 that your application has been approved or denied.
Applying for a CEBA refinancing loan with your financial institution resets the partial loan forgiveness deadline to March 28, 2023.
However, given the short timeline, it’s important to create a contingency plan in the event your primary financial institution is unable to offer CEBA refinancing. When the federal government conceived of the CEBA program, it was to meet the businesses’ needs for quick cash flow. One key element of this plan was that there was no underwriting. This means the government assumed the risks of the loan for all companies, even if the less credit-worthy ones.
The financial institutions were the easiest way for the government to deliver funds on this scale. By using the banks to facilitate these loans, the government could deploy billions of dollars, fast. This speed went a long way to help businesses navigate the COVID storm. However, it also means that when financial institutions offer to refinance CEBA loans now, they’re taking a risk, and this risk may be more than they’re willing to take.
As a result, they’ll conduct due diligence to determine whether the business is credit-worthy. Therefore, many companies that benefited from the CEBA loan program will not be able to refinance their CEBA loans with their bank or credit union.
December 31, 2026
December 31, 2026 is the last day the CEBA loan can be repaid in full. Companies electing to continue with the CEBA program will be paying 5% per year on the outstanding balance of the loan. If a business has a $60,000 loan, they would pay $250.00 on a monthly basis. Regardless of when the loan is repaid, interest begins to accrue on January 19, 2024, and the terms of the CEBA loan stipulate monthly interest payments. Assuming that a business pays the monthly interest on time every month, they’ll still be left with the daunting task of repaying $60k before December 31, 2026.
In these situations, a financial planner can offer a wide variety of helpful advice. Oftentimes it is better to pay small amounts of the loan principal on a regular basis so that a business is not faced with a large debt that may cause serious financial challenges in the long run. Working with your financial advisor or financial institution to understand the alternatives available, and which are the best ones for your specific situation, are a key component to managing the CEBA loan.
CEBA Deadlines: Summary
The CEBA program became more complex after the recent government announcements. Knowing key deadlines to take advantage of partial loan forgiveness and dates when interest payments are due, is critical to the financial well-being of SMBs.
While the federal government announced the changes and modifications to the CEBA program in order to encourage CEBA loan refinancing and provide added flexibility to companies, many still feel that it is not enough. As recently as October 20, 2023, the premiers of the provinces and territories sent a joint letter to Prime Minister Justin Trudeau asking the federal government to extend the repayment period (and partial forgiveness), by one year.
With less than three months to January 18, 2023, and over 200 financial institutions facing challenges in supporting the government’s initiatives, the federal government must be clear on the final deadline – leaving no chance of further revisions.