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

Planning to Repay the CEBA Loan

Planning to Repay the CEBA Loan
Reading Time: 5 minutes

The CEBA loan repayment date is approaching fast. On December 31, 2023, Canadian business owners who took out a CEBA loan are required to repay the balance of what they owe to take advantage of the loan forgiveness. After this date, interest will begin to accrue on any unpaid portion of the loan. At 5%, the interest rate on CEBA loans is reasonable compared to other lending institutions. However, the biggest downside to missing the deadline is eligibility for loan forgiveness.

CEBA loans were given out in two amounts: $40,000 initially, and up to $60,000 for eligible businesses as the pandemic’s impact dragged on. The forgiveness amount was set at up to $10,000 and $20,000, respectively, making forgiveness possible for 25-33% of the loan. To obtain this forgiveness, though, business owners need to pay back the other 67-75%. This means up to $30,000 or up to $40,000, depending on the loan.

CEBA Repayment for Businesses

Fortunately for business owners, there are several potential options for repaying your CEBA loan. One option is to pay back the loan in full, either all at once or through a series of installments. This may be a viable option, but with 49% of small businesses still making below-average revenues since the pandemic, many enterprises may find it difficult. As December 31, 2023 gets closer, many enterprises are considering other options. These include:

  1. Loan refinancing: Refinancing the CEBA loan with another financial institution can work for many businesses. Although the loan may bear more interest depending on your financial circumstances, it may be a better option than rolling over the amount given through the CEBA program. Not only will paying off the loan make you eligible for the forgiveness, but it may also help spread out the repayment over a longer period of time or with terms that better fit your budget. The Business Development Bank of Canada can sometimes offer more favourable terms compared to other lenders, given its mandate to support entrepreneurs.
  2. Partial loan refinancing: In cases where a business took out a $60,000 loan, $40,000 of this must be repaid in order to access the forgiveness. If your business can afford to pay a portion, for example $15,000, you may be able to finance a smaller portion of the loan from a lender — meaning lower rates and better terms.
  3. Borrowing or angel investing: Depending on your circumstances or the nature of the business, the Canadian Federation for Independent Businesses (CFIB) suggests borrowing the amount owed (up to the forgiveness amount) from a family member, connection, or angel investor. Keep in mind, this can involve giving away an equity stake in the business or creating a business plan for growth.

If you are unable to make the initial repayment on your CEBA loan, it is important to contact your financial institution as soon as possible to discuss available repayment options. Even if the terms of the loan are less favourable in terms or interest rate than rolling over the CEBA amount, doing so will save your business thousands in loan forgiveness. Keep in mind the threshold of what you have repaid so far—reaching the loan repayment deadline might be possible using various options.

No matter which option you choose, it is important to make a plan for repaying your CEBA loan before the December 31, 2023 deadline. Although many industry and business advocates are pushing for a CEBA loan repayment extension, the best plan of action is to pay what you can. There are options available for repaying your CEBA loan. Whether you choose a one-time lump sum payment or set up an arrangement for regular payments over time, it’s possible to find a solution that works. Canadian businesses can take advantage of refinancing opportunities to lower interest rates on their CEBA loans, or opt for a method like invoice factoring or revenue financing instead. Debt consolidation programs are also an option to help simplify the repayment process.

When repaying your CEBA loan, it’s important to plan ahead and take action. It can be easy to put off the task of organizing a payment plan, especially if you’re busy running a business. However, doing so is essential for ensuring that your loan will be paid on time and that you can reap all of the benefits of the program.

Alternative Options for Paying Your CEBA Loan

The CEBA loan repayment deadline is fast approaching, and missing it means missing out on a major perk. It’s easy to delay the process when you’re feeling overwhelmed or confused. However, there are plenty of resources available to help guide you through the process of CEBA loan repayment. If you’re looking for personalized advice, consider reaching out to a financial advisor or credit counselling service that can provide you with tailored guidance and information about your specific situation.

Finally, if you have experienced financial hardship due to the pandemic, you may be eligible for additional COVID relief programs from the Canadian government. This could include loan forgiveness programs or other forms of financial assistance that can help you pay off your CEBA loan before the deadline.

No matter which approach you take, it’s essential to look into all available options before deciding how to proceed with repayment so you can find the plan that works best for you. The CEBA loan repayment deadline is fast approaching, so be sure to act quickly to secure the best outcome for your financial future. If you have any questions or need additional assistance with understanding and managing the CEBA loan repayment process, feel free to reach out to us. We’re here to help!

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