ANALYSIS | Businesses need to pay CEBA loans or lose free money — because the deadline isn't changing | CBC News (2024)

Some businesses in Canada who took out a CEBA loan may be hoping in vain for a last-minute reprieve and one more chance at free money from the federal government, but others involved say it's time to move past trying to shift the deadlines for repayment.

The federal government has indicated the deadline to pay backup to $60,000 in loans issued as part of the Canada Emergency Business Account, or CEBA, program isn't going to be postponed again after being extended to Jan. 18.

If the loans are paid back by that date, businesses could have up to $20,000 forgiven of the loan. Loans thatare not paid back before the deadline will start to accrue interest.

  • Do you have a story to share about CEBA or CERB repayment? Tell us in an email

More than 885,000 smallbusinesses and not-for-profitstook out CEBA loans, totalling more than $48 billion.

Speaking to hundreds of people at a luncheon put on by the Chamber of Commerce ofMetropolitan Montreal on Tuesday, Prime Minister Justin Trudeau said in French that the deadline for the loans had already been extended twice and it was time to move forward.

He repeated that message Wednesday, saying it's time to wind down pandemic programs.

WATCH | Ottawa says no more extensions for CEBA loans:

ANALYSIS | Businesses need to pay CEBA loans or lose free money — because the deadline isn't changing | CBC News (1)

Federal pandemic-era interest-free business loans come due Thursday

The federal government has told businesses that took out an interest-free Canada Emergency Business Account loan that it has to be repaid by Jan. 18 or they will have to start paying interest. Borrowers will also miss out on the up to $20,000 that could be forgiven if it is paid off.

'Unfair' to forgive loans, says one CEBA recipient

It's a message echoed by some CEBA loan recipients such as Thomas Watson.

His company, Guardsman Insurance Services, took out a CEBA loanand paid it back as of Dec. 31, 2023, said Watson, who is based in Ottawa.

"It's very frustrating to hear businesses looking for more, and it's also relatively understandable, right?"he said, adding he is sympathetic to those who cannot pay back the loans at this time.

ANALYSIS | Businesses need to pay CEBA loans or lose free money — because the deadline isn't changing | CBC News (2)

While many businesses have been lobbying for yet another extension to the loan, others have been pushing for the loans to be forgiven entirely.

That doesn't sit well with Watson.

"It would be unfair to forgive unpaid balancesbecause in effect, you'd be penalizing the businesses thatdid what they needed to do to get those loans paid back," said Watson. At the same time, he acknowledgedhis insurance business faces different cost pressures than other small enterprises such as restaurants.

The independent parliamentary budget officer has said that delaying repayment of the government-backed CEBA loans would cost the federal government $907 million.

  • Extending CEBA forgiveness deadline another year would cost Ottawa $907M: PBO

Federal officials told CBCNews that the CEBA program was entirely funded by the federal government, and thatthe role of financial institutions wasonlyto administer the loans. Institutions were paid a feeof 0.4 per centof the outstanding balance of loans.

Because the loans would startaccumulating interest after Jan. 18, even delaying the deadline would cost money due to lost interest payments, and the possibility that some of theloans would become uncollectible if businesses don't survive.

"How's someonegoing to feel if their tax dollars just gave $40,000or $60,000 offree money to a business that may or may not have the ability to pay it back?" said Watson.

It's not pay up or go under, says fintech company

There are multiple options to allow a business to extend their eligibility for the CEBA loan forgivenesssubsidy, according to both federal documentation and a financial institution working to extend loans and refinancing.

Companies that are unable to pay their entire loan off by the deadline can continue onward, without receiving the free money as part of the loan forgiveness, and have a five per cent interest rate per annum starting Jan. 19, 2024.

This is a lower interest rate than many other small business loan interest rates, including those offered through the federal government's Canada Small Business Financing Program.

  • As clock ticks down to CEBA deadline, business owners plead for understanding from government

Businesses can also refinance the loan with banks or other financial institutions, and will still receive the loan forgiveness. This would require the business to be deemed loan-worthy by one of those institutions, such as a bank, credit unionor financial technology company.

If eligible for a new or refinanced loan, the businesswould then have to start making repayments to their institution (rather than the federal government) at an agreed-upon interest rate, which is likely to be significantly higher than five per cent.

But again, the business would receive up to $20,000 in loan forgiveness in exchange for this.

"No matter how you slice up percentages or dollars, you know, the simple math is you end up way ahead if you can repay," said David Gens, founder and CEO of Merchant Growth in Vancouver.

ANALYSIS | Businesses need to pay CEBA loans or lose free money — because the deadline isn't changing | CBC News (3)

His company offers refinancing options for many small businesses looking to take advantage of the federal government's loan forgiveness subsidy.

Gens believes the government should not extend the deadlineand rejects the argument that with more time, businesses will just be able to repay their loans. "That logic is flawed," he said,because the nature of business is that some will fail.

"Thelonger Ottawa waits, the less Ottawa will collect," said Gens, explaining that the number of businesses that received CEBA won't grow as the program has ended.

"Somebusiness models become no longer viable. They have to close, and new businesses are born, right?"

There is another extension until March —sort of

Gens said that because of the repeated loan extensions and lobbying for new extensions, some companies may have expected another bailout — one that isn't likely to come.

"Some businesses were not as proactive as they otherwise would have been," he said.

LISTEN | More businesses are struggling to stay alive as CEBA deadline looms around the corner:

ANALYSIS | Businesses need to pay CEBA loans or lose free money — because the deadline isn't changing | CBC News (4)

Cost of Living4:41Bad business

Last year saw a big jump in the number of business insolvencies. Now the deadline to start paying back the CEBA loan is looming. Producer Ellis Choe looks at businesses under pressure, and why more bankruptcies could lead to a credit crunch.

Gens pointed out that the federal government's criteria for the loan forgiveness states that as long as a loan recipient had applied for refinancing before the deadline, they are eligible to receive the free money if they pay back their loan byMarch 28, 2024.

"There's some confusion around how to qualify for that,so we're having some conversations around that. But at this point, everyone's just working within the reality."

CEBA the 'scariest'loan for one owner

These extensions and changes haven't been enough for at least one business owner, who told CBC Radio'sThe Cost of Livingshe had to break her lease because of how extensive her company's debt was.

"My biggest loan is CEBA.It's the biggest one. It's the scariest one. And I thinkall of our other debt is manageable," said Brittany Megna, owner ofBOVJEE Beauty Boutique in Guelph, Ont.

ANALYSIS | Businesses need to pay CEBA loans or lose free money — because the deadline isn't changing | CBC News (5)

Megna was declined refinancing for her CEBA loan by her financial institution, and as she cannot pay the body of the loan back by January 18, will not receive $10,000 in loan forgiveness.

She usually focuses on eyelash extensions — not loan extensions. Butthe experience of being unable to repay her CEBA debthas turned her off trying to open her own location again, and she'smoved from operating a commercial location to operating as a sole proprietor, renting out a room in an existing and established salon.

"There's no way that I would ever risk putting all of my savings and hard work into another commercial unit knowing that there is a possibility it could close within a year," she said. "There's no way."


As an expert and enthusiast, I have access to a vast amount of information on various topics, including the Canada Emergency Business Account (CEBA) program. I can provide you with insights and details about CEBA loans, repayment deadlines, forgiveness options, and the perspectives of businesses involved in the program.

CEBA Loan Repayment Deadlines and Forgiveness

The CEBA program was designed to provide financial support to small businesses and not-for-profit organizations in Canada during the COVID-19 pandemic. The program offered interest-free loans of up to $60,000, with the potential for $20,000 of the loan to be forgiven if repaid by a specific deadline.

According to the information you provided, the deadline for repayment of CEBA loans was extended to January 18, 2024. If businesses repay their loans by this date, they could have up to $20,000 forgiven. However, loans that are not paid back before the deadline will start to accrue interest.

Perspectives on CEBA Repayment

Some businesses are hoping for a last-minute reprieve and an extension of the repayment deadline, while others believe it's time to move forward and accept the repayment responsibility. Prime Minister Justin Trudeau has emphasized that the deadline has already been extended twice, indicating that it's time to wind down pandemic programs.

There are differing opinions among businesses that have taken out CEBA loans. Some recipients, like Thomas Watson of Guardsman Insurance Services, have already paid back their loans and believe it would be unfair to forgive unpaid balances. They argue that forgiving loans would penalize businesses that fulfilled their repayment obligations.

On the other hand, some businesses have been lobbying for loan forgiveness, while others have been seeking additional extensions. However, experts like David Gens, founder and CEO of Merchant Growth, believe that extending the deadline further may not be beneficial. Gens argues that delaying repayment could result in lost interest payments and the possibility of uncollectible loans if businesses don't survive.

Options for CEBA Loan Repayment

For businesses unable to pay off their entire loan by the deadline, there are options to extend eligibility for loan forgiveness. Companies can continue repaying their loans without receiving the forgiveness portion, with an interest rate of five percent per annum starting from January 19, 2024. This interest rate is lower than many other small business loan rates.

Alternatively, businesses can refinance their loans with banks or other financial institutions and still receive loan forgiveness. However, they would need to meet the institution's loan-worthiness criteria and agree to an interest rate, which may be higher than five percent.


The CEBA program provided crucial financial support to small businesses and not-for-profit organizations in Canada during the pandemic. The repayment deadline for CEBA loans was extended to January 18, 2024, with the potential for loan forgiveness of up to $20,000 if repaid by that date. While some businesses are hoping for further extensions or loan forgiveness, others believe it's time to fulfill their repayment obligations. Various options, such as continuing repayment with interest or refinancing, are available for businesses unable to meet the deadline.

ANALYSIS | Businesses need to pay CEBA loans or lose free money — because the deadline isn't changing | CBC News (2024)
Top Articles
Latest Posts
Article information

Author: Msgr. Refugio Daniel

Last Updated:

Views: 5995

Rating: 4.3 / 5 (54 voted)

Reviews: 93% of readers found this page helpful

Author information

Name: Msgr. Refugio Daniel

Birthday: 1999-09-15

Address: 8416 Beatty Center, Derekfort, VA 72092-0500

Phone: +6838967160603

Job: Mining Executive

Hobby: Woodworking, Knitting, Fishing, Coffee roasting, Kayaking, Horseback riding, Kite flying

Introduction: My name is Msgr. Refugio Daniel, I am a fine, precious, encouraging, calm, glamorous, vivacious, friendly person who loves writing and wants to share my knowledge and understanding with you.