CEBA-Extension of Deadlines and Loan Forgiveness for the Canada Emergency Business Account(CEBA)

Corporations Business Tax




In a recent announcement, the Canadian government has extended the repayment deadlines and introduced new flexibilities for the Canada Emergency Business Account (CEBA) program. This initiative aims to provide additional support to small businesses and not-for-profit organizations that have been impacted by the challenges brought on by the COVID-19 pandemic. The CEBA program, which initially ran from April 9, 2020, to June 30, 2021, has played a vital role in assisting nearly 900,000 entities by offering interest-free, partially forgivable loans of up to $60,000 to cover their operational expenses during these trying times.

Extended Repayment Deadlines:

Recognizing the unique circumstances faced by Canadian businesses, the government has decided to extend the CEBA loan repayment deadlines. The previous deadline of December 31, 2023, has been extended to January 18, 2024. This extension provides much-needed breathing room for businesses, especially during the hectic year-end period.

Refinancing Flexibility:

To further ease the burden on CEBA loan holders, the government is offering refinancing options. For those who submit a refinancing application with their financial institution by January 18, 2024, the repayment deadline for partial loan forgiveness is extended until March 28, 2024. This extension ensures that more small businesses and not-for-profits can access the relief they need and allows them additional time to await responses from their financial institutions regarding their refinancing applications.

Conversion to Three-Year Term Loans:

Starting January 19, 2024, outstanding CEBA loans, including those under refinancing extensions, will convert into three-year term loans. These loans will carry an interest rate of five percent per annum. Furthermore, the term loan repayment date is extended by an extra year, from December 31, 2025, to December 31, 2026. Essentially, this means that small businesses and not-for-profits will have automatic access to a three-year, low-interest loan of up to $60,000 if they have not repaid or refinanced their loans. This extended period offers a significant advantage for those facing challenges in securing refinancing or generating sufficient cash flow to meet the forgiveness deadline.

Loan Forgiveness Details:

Repaying the loan by the new deadline of January 18, 2024 (or March 28, 2024, if a refinancing application is submitted before January 18, 2024, to the financial institution that provided the CEBA loan) will result in loan forgiveness. Businesses that borrowed $40,000 will benefit from a $10,000 loan forgiveness, while those with $60,000 loans can enjoy a loan forgiveness of $20,000.

Real-Life Scenarios:

Let’s take a look at a couple of real-life scenarios to understand how CEBA loan holders can leverage these new repayment flexibilities:
  1. Sarah and Nick have a $40,000 CEBA loan. While they can’t repay the full amount by the forgiveness deadline, they don’t need to worry. On January 19, 2024, their loan will convert into a three-year term loan with five percent annual interest. They’ll make manageable monthly interest payments of around $167, with the principal amount due just before the term loan repayment deadline of December 31, 2026.
  2. Doug applies for $40,000 in financing from the same bank that provided his CEBA loan to pay off his $60,000 CEBA loan. Unfortunately, he doesn’t receive a response to his refinancing application by January 18, 2024. However, with the new refinancing extension, he has until March 28, 2024, to secure new financing from his bank. This allows him to pay off his CEBA loan and qualify for $20,000 in partial loan forgiveness.


These extended deadlines and refinancing options for the Canada Emergency Business Account offer much-needed relief to small businesses and not-for-profit organizations across Canada. As we move forward, financial institutions will directly contact CEBA loan holders to provide them with detailed information regarding their loans. This initiative aims to provide support during these challenging times, ensuring that businesses can focus on their recovery and growth. Stay tuned for more updates and information on this important program.
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