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The Canada Emergency Business Account (CEBA) is an initiative of the Government of Canada.  The official Government website is

Strategies for Repaying Your CEBA Loan: Know Your Options

Strategies for Repaying Your CEBA Loan
Reading Time: 4 minutes

As a financial advisor, I regularly help entrepreneurs and business owners manage their financial obligations. Right now, the most common concern is paying off debt related to the Canada Emergency Business Account (CEBA) loan. As most of the recipients from the CEBA loan program took on debt out of necessity, many business owners feel the pressure of the December 31, 2023 deadline. With the end of 2023 approaching and CEBA loan repayment on the horizon, it’s time to shed light on strategies and alternatives business owners can use to stay ahead of repayment deadlines.

How can you repay the CEBA loan without compromising business cash flow?

The CEBA loan is unique: In the midst of a global pandemic, the Canadian government was forced to offer businesses a lifeline. Many enterprises had to choose between shutting down the business during lockdowns or bolstering it with an infusion of cash. Given the uniqueness of the situation, it’s no surprise that there are concerns. How can businesses repay the CEBA loan before the deadline, without compromising on cash flow during unsteady economic times? The answer lies in both careful planning and the use of diverse strategies tailored to individual business needs.

How to Repay the CEBA Loan: Restaurant Owner

For example, consider the hypothetical case of John. John is a small business owner who operates a seafood restaurant in southern Ontario. John took out the CEBA loan in a hurry since the lockdowns made it difficult to continue paying staff. Now he’s worried about the debt he’ll have to repay, in addition to the demands of the current economy. With the CEBA deadline looming, we worked together to create a repayment strategy suite to his business needs. In this case, we worked with him to formulate a repayment strategy that maximized the existing resources he had in the business and diversified his repayment streams. By focusing on boosting sales through new marketing initiatives, expanding on delivery services introduced during the pandemic, and implementing cost-cutting strategies in line with the current food prices, John was able to produce surplus funds and allocate them toward his CEBA loan repayment.

How to Repay the CEBA Loan: Retail Industry

The retail industry was hit hard by the pandemic. In another hypothetical case, the founder of a retail startup in Alberta took out a CEBA loan to keep from closing her doors. When the deadline began to approach, she managed her CEBA repayment by strategically using the interest-free period. By setting aside a portion of monthly revenue for repayment, she accumulated a substantial capital fund that she will use to pay back her CEBA loan just before the interest-free period ends.

Don’t Delay When You Repay

The hospitality and restaurant industries were among the hardest hit during the pandemic. However, almost everyone in Canada (and around the world) felt the pinch. Aside from these specific cases, the general benefits of early and structured CEBA loan repayment are substantial:

  1. No Interest: The CEBA loan is interest-free until December 31, 2023. Clearing off the debt before this period can result in substantial savings in interest alone.
  2. Loan Forgiveness: 33% (up to $20,000) of the loan is forgivable if repaid by the deadline, significantly reducing the total repayment amount.
  3. Better Credit Standing: The CEBA loan was facilitated by banking institutions in Canada, and timely loan repayments improve the credit rating of the borrower, which is something business owners often need. Not only is there less loan to repay, fast CEBA repayment helps ensure better financial opportunities for the business in the future.

Although CEBA loan repayment strategies can be highly beneficial for borrowers across the board, each business is unique. What works in one case may not work for another, so it’s essential to develop a plan aligned with the business model, financial situation, and long-term goals.

The CEBA loan repayment deadline is imminent. Business owners looking to the end of 2023 can be daunted by the prospect of repaying what was a vital loan for many. However, don’t delay: with the right plan in place, the repayment process is manageable, even in a choppy economy. For business owners and entrepreneurs struggling with CEBA loan repayments, consulting a financial advisor or your financial institution is an important first step.

A robust CEBA loan repayment plan not only helps handle debt obligations but also positions the business for continued growth. Taking action today can lead to significant savings and benefits in the future—and with such a significant portion of loan forgiveness on the line, time is of the essence. Don’t let the CEBA loan repayment deadline catch you unprepared: the best time to think about paying back your CEBA loan is right now.

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