Canadian Government Extends Loan Forgiveness Deadline
The Canada Emergency Business Account (CEBA) program has provided interest-free, partially forgivable loans to nearly 900,000 small businesses and not-for-profit organizations to help them navigate the pandemic and remain resilient. However, the Omicron variant has delayed the recovery for businesses in many parts of the country.
Yesterday, Deputy Prime Minister and Finance Minister, Chrystia Freeland and the Minister of International Trade, Export Promotion, Small Business and Economic Development, Mary Ng announced that the repayment deadline for CEBA loans to qualify for partial loan forgiveness is being extended from Dec. 31, 2022, to Dec. 31, 2023, for all eligible borrowers in good standing.
Deputy Prime Minister and Finance Minister, Freeland said that: “As Omicron has reminded us, we are still living in a pandemic. Our government understood, from the outset, that we had to put in place unprecedented measures to meet this unprecedented challenge. By providing small businesses with additional time to repay their loans and still have partial loan forgiveness, affected businesses and workers will continue to have the support they need to get through the pandemic.”
This extension will support short-term economic recovery and offer greater repayment flexibility to small businesses and not-for-profit organizations, many of which are facing continued challenges due to the pandemic.
Repayment on or before the new deadline of Dec. 31, 2023, will result in loan forgiveness of up to a third of the value of the loans (meaning up to $20,000).
Outstanding loans would subsequently convert to two-year term loans with interest of 5% per annum commencing on Jan. 1, 2024, with the loans fully due by Dec. 31, 2025.
Minister Ng commented: “As we fight the latest wave of the COVID-19 pandemic, we will continue to stand by Canada’s small businesses. Almost 900,000 small businesses accessed CEBA loans to help maintain operations through this difficult time. By extending the repayment deadline, we are ensuring that these hard-working business owners are able to focus on their operations and building back from this pandemic stronger than ever.”
The government is also announcing that the repayment deadline to qualify for partial forgiveness for CEBA-equivalent lending through the Regional Relief and Recovery Fund is extended to Dec. 31, 2023.
