In response to the surge of COVID-19 cases the Federal Government has extended the deadline for repayment of the Canada Emergency Business Account (CEBA) loans to qualify for partial loan forgiveness from December 31, 2022, to December 31, 2023, for eligible borrowers in good standing.
Crowe MacKay's tax advisors summarize these changes below.
CEBA partial loan forgiveness
The extension of the deadline is intended to support short-term economic recovery and offer greater flexibility in repayment to small businesses and not-for-profit organizations. Repayment on or before the new deadline of December 31, 2023, will result in loan forgiveness of up to a third of the value of the loans (meaning up to $20,000).
Missing the extended CEBA repayment deadline
Those whose loans are outstanding after the repayment deadline will have their loans converted to two-year term loans with an annual interest rate of 5% commencing on January 1, 2024, with loan repayments fully due by December 31, 2025.
The government has also announced that the repayment deadline to qualify for partial forgiveness for CEBA-equivalent lending through the Regional Relief and Recovery Fund is extended to December 31, 2023.
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