COVID-19 | March 31 CEBA Debt Forgiveness Deadline

It is important to note that the Canadian Emergency Business Account (CEBA) debt forgiveness amount is calculated on the highest amount drawn from your CEBA at any time up to and including a date to be determined by your financial institutions. You should discuss with your account manager at your financial institution to ensure to meet the program requirements in order to benefit from the forgiveness ($10,000 to $20,000):

  • If you borrowed $40,000 or less:
    • 25% loan forgiveness will apply when you repay by December 31, 2022 amount equal to 75% of the highest amount drawn from your CEBA.
    • If less than 75% the maximum amount borrowed/drawn is paid by December 31, 2022, you will receive $0 in forgiveness. There is no pro-ration of the amount to be forgiven if an amount less than 75% of the maximum amount borrowed/drawn is repaid.
  • If you borrowed more than $40,000 and up to $60,000:
    • The portion of forgiveness is based on a rate of 25% on the first $40,000 plus 50% on amounts above $40,000 and up to $60,000.
    • The 25% and the portion of forgiveness based on a rate of 50% are combined into a single tranche of forgiveness. In other words, if $60,000 is borrowed, no forgiveness is available unless $40,000 is repaid. For purposes of loan forgiveness, borrowings and repayments on both loans will be aggregated.

  • Financial institutions may record your $40,000 loan and $20,000 expansion as two separate loans. For purposes of loan forgiveness, borrowings and repayments on both loans will be aggregated.
  • Certain financial institutions will open a new credit card account for the CEBA with a $0 balance. From this account you will need to transfer funds to your business banking account. This can affect the maximum amount borrowed/drawn. If no amounts are transferred it means no amounts were borrowed and hence there is nothing to pay back and no loan forgiveness will be issued.
  • Other financial institutions will open a new credit card account for the CEBA with $40,000 automatically transferred to your business banking account. Therefore, already having drawn the maximum amount of the loan.
  • As financial institutions have their own way of operating, you should discuss with your account manager to ensure you are meeting program requirements to benefit from loan forgiveness.

  • March 31, 2021 is the deadline to apply for $60,000 CEBA loan or the $20,000 expansion.
  • If the outstanding principal, other than the amount of potential debt forgiveness, is repaid by December 31, 2022, the remaining principal amount will be forgiven.
  • 5% interest per annum starting January 1, 2023 if the outstanding principal, other than the amount of potential debt forgiveness, remains unpaid.
  • If not repaid prior to December 31, 2022, unpaid principal is due on December 31, 2025.

We offer a Crisis Relief Program to support you throughout the process. Do not hesitate to contact a member of our team.

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2021-03-09

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