Dear Clients and Friends,
The Canada Emergency Business Account (CEBA) program was created to provide funds to small businesses that had lost income as a result of the COVID-19 pandemic. Initially, eligible applicants were able to receive a loan of $40,000. In December 2020, approved CEBA borrowers were able to receive a $60,000 loan. Borrowers that had received the initial $40,000 CEBA loan were able to apply for the CEBA expansion, which offered eligible businesses an additional $20,000 of financing. The application period for the CEBA Program closed on June 30, 2021 and the funding period has now ended.
The CEBA forgiveness repayment date has been extended to December 31, 2023 for eligible CEBA loan holders in good standing. Borrowers that qualified for the extended term have been contacted by their financial institution with details regarding the new repayment date.
All applicants that meet CEBA eligibility criteria will have the following repayment terms:
| Interest | Repayments & Maturity | Debt Forgiveness |
| 0% per annum interest until December 31, 2023 5% per annum interest starting on January 1, 2024; interest payment frequency to be determined by your financial institution | No principal repayment required before December 31, 2023 If loan remains outstanding after December 31, 2023, only interest payments required until full principal is due on December 31, 2025 | If the outstanding principal, other than the amount of potential debt forgiveness, is repaid by December 31, 2023, the remaining principal amount will be forgiven, provided that no default under the loan has occurred |
All applicants that meet CEBA eligibility criteria will have the following terms of forgiveness:
- For borrowers that received $40,000 or less – Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before December 31, 2023 will result in loan forgiveness of 25%, up to $10,000.
- For borrowers that received a $40,000 loan and subsequently received the $20,000 expansion – Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before December 31, 2023 will result in a single portion of loan forgiveness up to $20,000, based on a blended rate of 25% on the first $40,000, plus 50% on amounts above $40,000 and up to $60,000.
- For borrowers that repaid their original $40,000 loan, claimed forgiveness, and thereafter received the $20,000 expansion – Repaying the outstanding balance of the $20,000 expansion (other than the amount available to be forgiven) on or before December 31, 2023 will result in loan forgiveness of 50%, up to $10,000.
- Overall, depending on the amount of your CEBA loan, the amount that is eligible for forgiveness will vary. The forgiveness benefit allows a portion of your loan to not require repayment:
- If you received a $40,000 CEBA loan, you can repay 75% of the total amount ($30,000) by December 31, 2023 and the remaining 25% ($10,000) is eligible for a loan forgiveness benefit. This will require monthly repayments of $2,500, beginning January, 2023.
- If you received a $60,000 CEBA loan, you can repay 66% of the total amount ($40,000) by December 31, 2023 and the remaining 34% ($20,000) is eligible for a loan forgiveness benefit. This will require monthly payments of $3,333.33, beginning January, 2023.
The forgivable portion of the CEBA loan, $10,000 or $20,000, is taxable in the year in which the loan is received.
For more details, please visit the following link: https://ceba-cuec.ca/
Please do not hesitate to contact us at info@clearhouse.ca or (647) 969 7382 if you have any questions.
Kindest Regards,
Your Clearhouse LLP Team