CEBA Loan Repayment Deadline Extended: Challenges and Solutions

The Canadian government has decided to give businesses more time to repay their CEBA loans. Originally, businesses who took on the loan to mitigate the damage from the lockdowns had to pay the amount by December. 31, 2023 in order to have a portion forgiven as a grant (20,000.00), but instead they have until January 18th, 2024. However, some, such as John Wishart, CEO of the Chamber of Commerce for Greater Moncton, are worried that these extra 18 days might not be enough for businesses struggling with financial hardship.

A recent survey done by these chambers found that about 20% of businesses will not be able to pay back the loan by the old December 31, 2023 deadline. Another 40% aren't sure if they can or not. Many businesses are having a tough time due to the skyrocketing interest rates, and the prices of their primary cost of goods are increasing. This new January 18th, 2024 deadline still seems awfully soon for many still recovering from the COVID lockdowns, and are pushing for an entire year’s extension.

There's another problem too: the interest rates. Right now, CEBA loans don't have any interest until January 18, 2024. But after that, they'll start charging 5% interest every year. And how often you need to pay that interest depends on your bank. This change in interest rates makes it even more important to extend the time businesses have to pay back the loan. They need time to figure out these changes, and a year-long extension sounds like a better way to help them out.

Businesses presently have three options on how to deal with these challenges: First, they can repay the whole loan by the new deadline of January 18. Second, they can work out a plan with their bank to clear the debt by the end of March. And finally, if a business can't pay, their loan will turn into a standard loan with interest charges, and no loan forgiveness from the government. These options have big consequences for businesses trying to recover financially.