Ticking Clock, Tight Grip: Canadian Small Businesses Struggling with Expired CEBA Repayment Deadline

The Canada Emergency Business Account (CEBA), a lifeline for countless small businesses during the COVID-19 pandemic, has become a source of renewed stress as the deadline for partial loan forgiveness passed on January 18, 2024. While many businesses embraced the opportunity to secure up to $60,000 in interest-free funding, the pressure to repay or refinance the full amount is now weighing heavily on their shoulders.

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What was the CEBA program?

Launched in 2020, CEBA offered small businesses and not-for-profits a much-needed financial anchor during the initial months of the pandemic. The program’s appeal lay in its interest-free nature and the potential for partial forgiveness – up to 33% or $20,000 – for businesses meeting specific eligibility criteria.

The Repayment Crunch:

The crux of the current pressure point lies in the repayment terms. Businesses that failed to repay or refinance their loans by January 18th have lost the eligibility for forgiveness. Their remaining balance now converts to a term loan with interest accruing at 5% per annum until the final repayment date of December 31, 2026.

The Impact on Businesses:

For many small businesses, the financial burden of repaying the full loan, coupled with ongoing economic uncertainties, is creating significant stress. This stress manifests in various ways:

How Many Businesses Repaid?

Exact figures regarding the number of businesses that successfully repaid or refinanced their CEBA loans are not yet available. However, preliminary reports suggest that a significant portion of the recipients may not have met the January 18th deadline. This highlights the need for ongoing support and flexibility in repayment options for struggling businesses.

Moving Forward:

The CEBA program undoubtedly served as a crucial lifeline during an unprecedented crisis. However, the expiration of the forgiveness deadline raises concerns about the long-term financial well-being of many small businesses. It’s imperative that policymakers, financial institutions, and support organizations come together to explore solutions that:

There have been initiatives to try and delay the call on the CEBA loan program. If you are interested, there is a petition on change here.

By implementing such measures, we can ensure that the valuable contributions of small businesses continue to drive Canada’s economic recovery and that the sacrifices made during the pandemic are not overshadowed by the burden of lingering debt.


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