Time’s Up for CEBA Loan Repayments: Missing Deadline Costs Businesses

Time's Up for CEBA Loan Repayments Missing Deadline Costs Businesses

[By: Anis Heydari] – Canadian businesses that got loans through the Canada Emergency Business Account (CEBA) are facing a crucial deadline. The government isn’t planning to extend the repayment date any further. Businesses need to pay back up to $60,000 by January 18 to get a part of their loan forgiven. If they miss this date, they’ll start paying interest.

Prime Minister’s Firm Stance on Deadline

Prime Minister Justin Trudeau, speaking at a Montreal Chamber of Commerce event, insisted that the loan deadline, which had already been extended twice, will not be pushed further. He emphasized the need to end pandemic-era financial aid programs.

Perspectives on Loan Repayment

Thomas Watson of Guardsman Insurance Services, who repaid his CEBA loan, expressed frustration over businesses wanting more extensions. He understands their challenges but believes it would be unfair to forgive loans for those who haven’t repaid yet. The Parliamentary Budget Officer has estimated that delaying repayment would cost the government $907 million.

Options Beyond the Deadline

Businesses that can’t pay the full amount by the deadline have other choices. They can still repay their loans with a 5% interest rate starting from January 19, 2024. This rate is lower than many other business loans. Businesses can also refinance their loans with banks or other institutions, still qualifying for the loan forgiveness. However, the interest rates may be higher in this case.

David Gens, CEO of Merchant Growth, argues against extending the deadline. He believes that businesses should focus on repayment to benefit from loan forgiveness.

Extension Until March for Some

There is a conditional extension until March 28, 2024, for businesses that applied for refinancing before the deadline. They can still get loan forgiveness if they repay by this new date.

Real Impact on Business Owners

Brittany Megna, who runs a beauty boutique, shares her struggle with the CEBA loan. Unable to refinance and facing the January deadline, she fears not qualifying for the $10,000 forgiveness. This challenge has led her to move from running her own commercial location to working as a sole proprietor within an established salon.

The CEBA loan deadline is a decisive moment for Canadian businesses. While there are options for those unable to meet the deadline, the emphasis remains on repayment to benefit from loan forgiveness.

Source: https://www.cbc.ca/news/business/ceba-loan-not-extended-1.7085696