Navigating CEBA Loan Forgiveness: Ensuring Your Continued Eligibility

The Canadian Emergency Business Account (CEBA) has been a crucial lifeline for many businesses during the challenging economic climate. If you’re a CEBA loan holder, you might be wondering about the recent developments regarding loan forgiveness. January 18th was the deadline to access the forgivable portion of your CEBA loan. However, there is a special extension available to certain CEBA loan holders. The new extension is March 28th to access loan forgiveness, provided you meet the new requirements. Let’s break down the requirements and what you need to know.

What’s the New CEBA Loan Forgiveness Deadline?

The new deadline for CEBA loan forgiveness is March 28th, providing a special extension to retain the forgivable portion of your loan. This means that your CEBA loan must be paid in full by March 28th, 2024, in order to access the loan forgiveness.

Who’s Eligible?

To be eligible for the extension, you need to meet certain criteria:

• CEBA Loan Holder: You must hold a CEBA loan.

• Refinancing Request by January 18th: You must have submitted a refinancing request on or before January 18th, with the same financial institution that provided your CEBA loan. Whether you were approved or rejected for refinancing, you’re still eligible for forgiveness with the new deadline.

What If You Were Rejected for Refinancing?

Even if you were rejected for refinancing or denied the opportunity to apply for refinancing from your CEBA bank, you can still qualify for the extension. As long as your account is in good standing and your FI confirms your access to the March 28th deadline, you’re eligible.

Documentation and Communication

Ensure you receive any decisions from your financial institution in writing, so you have proof that you applied for refinancing on or before January 18th.

Interest Charges

Starting January 19th, 2024, 5% interest will be charged on the outstanding amount of your CEBA, including the forgivable portion.

How Can You Access the Forgivable Portion?

To access the forgivable portion of your loan, one effective strategy is obtaining a new refinancing loan. Here’s how it works:

By obtaining a refinancing loan, the lender will pay off your CEBA loan in full immediately. This ensures your loan is paid off in full by the March 28th deadline.

You can then access the forgivable portion of your loan from the Canadian government, provided you meet all other eligibility criteria.

In essence, opting for a refinancing loan enables you to secure the forgivable portion, potentially resulting in lower overall payments.

Get in touch with your preferred lender for more information on refinancing your CEBA loan.

If you’re unable to repay your loan in full or secure refinancing by March 28th, here’s what to know:

If you’re eligible for the extension, you can access the forgivable portion provided that you pay your loan in full by March 28th. This can be paid in full either out of pocket or by refinancing the loan with a lender. However, if you don’t pay the loan in full by the repayment extension deadline, you lose the forgivable portion. In either case, your CEBA will convert to a term loan that can be repaid over 3 years, ending on December 31, 2026.

Interest Payments: Businesses will be required to pay monthly 5% interest payments on the full outstanding balance of their CEBA, including the forgivable portion, with the option to pay the principal amount just before the term loan repayment deadline of December 31, 2026.

Eligibility Criteria Recap

To be eligible for the forgiveness extension, you need to fulfill the following criteria:

• CEBA Loan Holder: You must currently hold a CEBA loan.

• Refinancing Request by January 18th: You submitted a refinancing request on or before January 18th with the same financial institution that provided your CEBA loan. Whether your refinancing request was approved or rejected, you’re still eligible for forgiveness.

Navigating CEBA loan forgiveness and the recent extension can be complex, but understanding your eligibility and options is essential. Make sure to communicate with your financial institution, gather necessary documentation, and consider your repayment strategy wisely. With the right approach, you can effectively manage your CEBA loan obligations and secure your business’s financial future.