The federal government is extending the deadline for small businesses to repay their Canada Emergency Business Account (CEBA) loans until the end of 2023.
The government introduced CEBA in April 2020 as an interest-free loan program, initially offering up to $40,000 to small businesses and nonprofits that have suffered a loss of revenue due to COVID-19 . An expansion was then offered, allowing businesses to apply to receive up to $60,000 in loans.
Ahead of Wednesday’s update, if claimants repaid their loan balances at or before the end of 2022, the government planned to cancel up to a third of their loan.
Now, eligible businesses “in good standing” will have until December 31, 2023 to repay and be eligible for debt forgiveness of up to $20,000.
Prime Minister Justin Trudeau and Minister of International Trade, Export Promotion, Small Business and Economic Development Mary Ng made the announcement Wednesday, noting that given the new restrictions many businesses are facing due to of the current push from Omicron, they may need more time to repay their loans.
“As workers, small businesses and residents across the country face renewed uncertainty and with new lockdowns, rising case numbers and the Omicron variant, we continue to find out what is the best thing for our economy is to support our workers and businesses during this pandemic,” Ng said.
The government is also extending until December 21, 2023 the repayment deadline for the partial forgiveness of what Ng called the “CEBA-equivalent loan” provided through the Regional Relief and Recovery Fund.
“We’ve heard from companies that they’re looking for that flexibility, and that’s what today’s announcement is all about. This extra year will help businesses get that flexibility to work together through this pandemic, until this pandemic is over. “
Loans outstanding after the new deadline will convert to two-year term loans with an interest rate of 5%, beginning January 1, 2024, with loans due in full by December 31, 2025.
While applications for these loans closed in mid-2021, since its launch, 898,254 businesses have been approved for these loans, totaling $49.17 billion in federal assistance.