It’s Crunch Time! Or, It Was…

December 31st, 2022 was the original due date for the outstanding balance to be repaid in order to be eligible for partial loan forgiveness. That is no longer the case.

The government has announced the new deadline is December 31, 2023 – but there’s a catch. In order to be eligible for this extension, your CEBA loan must be in good standing.

How do you know if you qualify?

If you qualify for the new extended term, you will be contacted by your financial institution with details regarding the new repayment date. If you haven’t heard from the financial institution holding your CEBA loan, now would be a good time to reach out to them. Some borrowers have already been contacted to let them know their eligibility status for the repayment deadline extension.

From Video Tax News:

“CEBA eligibility criteria validations have been completed for all borrowers and the results of these validations are final. These validations were conducted in partnership with the Canada Revenue Agency (CRA) and revalidated periodically since the launch of CEBA in April 2020 to ensure an accurate reflection of the information in CRA records.”

How much will be forgiven?

If your initial loan was $40,000, up to 25% or $10,000 would be forgiven if the balance of the loan was repaid by the deadline. In this example, that would mean that $30,000 of the $40,000 would have to be repaid before the Dec 31, 2023 deadline.

There was a second, $20,000 loan available – which allowed for up to 50% or $10,000 to be forgiven, if the balance of the loan was repaid by the same Dec 31, 2023 deadline.

If a borrower received the full $60,000 CEBA loan, and repays $40,000 by the deadline, the remaining $20,000 will be forgiven.

If you borrowed $60,000, and have repaid less than $40,000 by the deadline, no forgiveness is available (harsh!). This differs from the original loan forgiveness that we understood would be available to borrowers.

What if I don’t repay the loan balance by the deadline?

If the loan balance is not repaid by the deadline, the loan bears interest at 5% per annum, with interest only payments until Dec 31, 2025 at which time full principal repayment is due.

I have questions – where do I go?

If you have questions about your CEBA loan, you will either go to your financial institution or call the CEBA call center.

Your financial institution has answers on the loan balance, outstanding amount that must be repaid, acceptable methods of repayment, and the terms of the loan.

The CEBA call center has information regarding eligibility for the CEBA program and the final status of the loan application. CEBA Call Centre: 1-888-324-4201. The CEBA Call Centre is available Monday to Friday from 9AM to 6PM Eastern Standard Time, excluding statutory holidays.

For additional information, please visit https://ceba-cuec.ca/ and https://www.videotax.com/web-tips-articles/ceba-extended-repayment-details