Canada Emergency Business Account: Government extends repayment and partial loan forgiveness deadlines

Prime Minister Justin Trudeau has declared that the government is granting an additional year for businesses to repay loans obtained through the small business pandemic loan program. However, it’s crucial to note that businesses must still repay the forgivable portion of the loan within the next few months to avoid losing that benefit.

This program, known as the Canada Emergency Business Account (CEBA), was initiated during the peak of the pandemic to provide support to small businesses that had to close or limit their operations due to public health restrictions. Under this program, businesses could request interest-free loans backed by the federal government, with a maximum limit of $60,000 per applicant. To encourage prompt repayment, up to $20,000 of the loan would be forgiven if the remaining amount was repaid by a specified deadline. Initially set for the end of 2022, this repayment deadline was later extended to the end of 2023.

For businesses unable to meet the extended deadline, they would start incurring interest on the outstanding loan amount and would be required to fully repay it by the end of 2025. However, this repayment deadline has now been pushed further to the end of 2026.

Prime Minister Trudeau explained, “While many businesses have already repaid their loans, we recognize that some need a bit more time to meet their obligations.”

To facilitate this extension, businesses will have until January 18, 2024, to qualify for debt forgiveness. Those businesses that have refinanced their loans will be granted until March 28 to meet the requirements. After January 19, 2024, all outstanding loans will begin accruing five percent interest.

It’s worth noting that nearly 900,000 businesses were approved for this program, receiving a total of just over $49 billion in loans. However, as of May 31, only 21 percent of these businesses had fully repaid their loans.

The announcement regarding CEBA is part of a series of new measures introduced by Prime Minister Trudeau to address concerns about the rising cost of living.

CEBA extended to October 31st. Expanded to include more businesses.

On August 31st, Deputy Prime Minister and Minister of Finance Chrystia Freeland announced the extension of the Canada Emergency Business Account (CEBA) to October 31st, 2020. This will give small businesses 2 additional months to apply for the $40,000 loan.

In addition, the Federal Government said it was working with financial institutions to make the CEBA program available to those with qualifying payroll or non-deferrable expenses that have so far been unable to apply due to not operating from a business banking account.

Apply online at the financial institution your business banks with:

Saving for Education

Post-secondary education can be expensive, however having the opportunity to plan for it helps with making sure that you’re capable to meet the costs of education. In addition, when you have a plan, it’s easier to make financial decisions that align with your goals and provide peace of mind. In the infographic checklist, we outline 6 factors to consider when paying for education: 

For parents:

  • How much to save and when will your child start school?

  • Registered Education Savings Plan- have you a family RESP plan and received the Canadian Education Savings Grant? If your income is low enough, you could qualify for the Canada Learning Bond.

  • Savings- are you saving separately for your child’s education? Cash Value Life Insurance- have you considered using this as a savings vehicle for your child’s education. What happens if your child decides not to go to school? These alternative savings vehicles provide flexibility so that you can use the funds for something else such as a down payment for a future home.

For children:

  • Will the child be working part time and have their own savings for school?

  • Can the child apply for scholarships, bursaries or grants?

  • Will they need to apply for government student loan, personal loan or personal line of credit?

If you need help planning to save for your child’s post-secondary education, contact us!