Updated October 16, 2026
Short answer: closing your business does not cancel your CEBA loan. The official CEBA FAQ says you must repay the loan even if you close the business. What happens next depends on how the business was set up.
If the business was a corporation
- The corporation still owes the balance after it stops operating.
- If the loan isn’t repaid by December 31, 2026, it is likely to be assigned to the CEBA Program, and the CRA can pursue the corporation for it.
- Owners are generally not personally liable, because the CEBA program did not require personal guarantees. See is the CEBA loan personally guaranteed?
- A corporation with outstanding debts cannot simply be dissolved. Talk to your accountant and a lawyer about winding it up properly, including final tax returns.
If you were a sole proprietor or partner
- The CEBA loan is your personal debt and stays with you after the business closes.
- The CRA can pursue you personally once the loan is assigned for collection.
- If you cannot repay, a CEBA loan is unsecured debt and can generally be included in a consumer proposal or personal bankruptcy. A Licensed Insolvency Trustee can explain your options.
If you are thinking about closing
If the business is still operating and can carry monthly payments, compare that with closing. Refinancing spreads the balance over regular payments; the interest is usually higher than CEBA’s 5%, but it keeps the business and your credit intact. If the business has no future, contact your bank before December 31 and, once the loan is assigned, the CRA, to discuss a payment arrangement based on your ability to pay.
Quick checklist
- Get your exact payoff balance from your bank or credit union.
- Confirm who the borrower is on your loan agreement.
- Talk to your accountant before closing an incorporated business.
- If you are personally liable and cannot pay, speak to a Licensed Insolvency Trustee early.
Next step
If your business is still operating, refinancing replaces the December 31 lump sum with regular payments. Compare lenders that refinance CEBA loans, or use the repayment calculator to size the payment.
This article is general information, not legal, tax or financial advice. ceba.ca is an independent website and is not affiliated with the Government of Canada. Official program information is at ceba-cuec.ca. If your loan has been assigned to the CEBA Program, the CRA CEBA Contact Centre is at 1-800-361-2808.