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Businesses who applied for the CEBA Loan and are in good standing have until January 18, 2024 (extended from December 31, 2023) to repay the loan, in order to qualify for the partial loan forgiveness.

Repayment Terms:

Interest:

• 0% per annum interest until January 18, 2024.

• 5% per annum interest starting on January 19, 2024, until the repayment date.

Repayments & Maturity:

• Businesses will qualify for partial loan forgiveness should they repay the loan less the amount to be forgiven by January 18, 2024, resulting in no interest being accrued on the loan.

• If the loan remains outstanding on January 19, 2024, it will then convert to a non-amortizing term loan with full principal repayment due on December 31, 2026 plus any accrued interest.

Debt Forgiveness:

• If the outstanding principal, other than the amount of loan forgiveness is repaid by January 18, 2024, the remaining principal amount will be forgiven.

Refinancing Loan Application:

• A further extension is available if businesses submit a refinancing loan application to the financial institution that provided your CEBA loan by January 18, 2024 but requires a grace period in order to finalize the payout of your CEBA loan, you may still be able to qualify for partial loan forgiveness if the outstanding principal of your CEBA loan, other than the amount of potential debt forgiveness, plus any applicable interest is repaid by March 28, 2024.

 

Terms of the Forgiveness:

If you borrowed $40,000 or less:

• Repaying the outstanding balance of the loan (other than the amount available to be forgiven) by January 18, 2024, will result in 25% (up to 10,000) in loan forgiveness.

• Example: Amount Borrowed: $40,000, would require a repayment of $30,000 by January 18,2024, resulting in an amount of $10,000 being forgiven.

If you borrowed more than $40,000 and up to $60,000:

• Repaying the outstanding balance of the loan (other than the amount available to be forgiven) by January 18, 2024, will result in the following of 25% on the first $40,000 and 50% on amounts above 40,000 an up to 60,000.

• Example: Amount Borrowed: $60,000, would require a payment of 40,000 by January 18, 2004, resulting in an amount of $20,000 being forgiven. ($40,000*25% + $20,000 * 50%)

Please contact your financial institution to arrange payment or consider refinancing options by January 18, 2024. For more information, please refer to the Government of Canada website.

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Canada Emergency Business Account (CEBA) (ceba-cuec.ca)

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Disclaimer:
The information contained herein is general in nature and is based on proposals that are subject to change. You should always contact your trusted advisor for specific guidance pertaining to your individual tax needs. If you are looking for Tax Services, Platinum Tax & Accounting provides personalized support about your unique situation.

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