FAQ Archive — Refinancing and Forgiveness

What were the requirements for a refinancing application on or before January 18, 2024, to qualify for the extended forgiveness deadline of March 28, 2024?

The deadline to apply for refinancing in order to qualify for an extended forgiveness deadline has now passed.

If you were an eligible Loan Holder in good standing and you applied to refinance your CEBA Loan at the same financial institution that originally provided your CEBA Loan on or before January 18, 2024, you could have qualified for partial loan forgiveness if the outstanding principal of your CEBA Loan, other than the amount available to be forgiven, was repaid on or before March 28, 2024. This did not prevent you from also applying for refinancing with other lenders—as long as you applied for refinancing at the same financial institution that originally provided your CEBA Loan and your CEBA Loan was repaid by March 28, 2024, you could have qualified for partial loan forgiveness.

To provide you with flexibility to find the most suitable refinancing solution for your situation, the CEBA Program did not limit the loan type or terms that qualified as a refinancing application. As such, a range of potential refinancing solutions may have been offered by your financial institution, including applying for or requesting new credit or making or requesting changes to an existing credit facility for the purpose of repaying your CEBA Loan. Refinancing products provided by financial institutions were conventional loans between you and your financial institution. They were underwritten using the standard lending practices of your financial institution and are not affiliated with the CEBA Program or the Government of Canada.

Please note that if your CEBA Loan remained outstanding on January 19, 2024, interest at a rate of 5% per annum commenced, even if you applied for refinancing on or before January 18, 2024, and were waiting for your refinancing application to be reviewed or the proceeds of an approved refinancing loan to be funded or applied to your CEBA Loan balance.

Can I raise a dispute to change my repayment terms?

No. The CEBA Program is no longer providing a review, assessment or re-determination of a CEBA Loan Holder’s eligibility status, final outcome, or repayment term. As the application and funding periods for the CEBA Program have now closed, the opportunity for further resolution has now passed and applications will not be reconsidered by the CEBA Program.

I heard that a one-year extension of the CEBA Program repayment deadline was announced. Which deadline was extended?

On September 14, 2023, the Government of Canada announced a one-year extension of the final loan maturity date – from December 31, 2025, to December 31, 2026 – subject to an interest rate of 5% per annum for eligible CEBA Loan Holders in good standing.

Loan Holders that were determined to not have met the CEBA eligibility criteria for the loan they received were required to repay their loan in full on or prior to December 31, 2023.

What were the repayment terms for the $40,000 and $60,000 loan and the $20,000 expansion?

Eligible CEBA Loan Holders in good standing have the following repayment terms:

Interest:

• 0% per annum interest until January 18, 2024
• 5% per annum interest starting on January 19, 2024; interest payment frequency may vary by financial institution

Repayments and Maturity:

• No principal repayment was required before January 18, 2024; if loan remained outstanding on January 19, 2024, it is now a non-amortizing term loan with full principal repayment due on December 31, 2026

Debt Forgiveness:

• If the outstanding principal, other than the amount of potential debt forgiveness, was repaid on or before January 18, 2024, the remaining principal amount will be forgiven.

• If you submitted a refinancing loan application to the financial institution that provided your CEBA Loan on or before January 18, 2024, and required a grace period in order to finalize the payout of your CEBA Loan, you could have qualified for partial loan forgiveness if the outstanding principal of your CEBA Loan, other than the amount of potential debt forgiveness, was repaid on or before March 28, 2024.

What were the terms of the forgiveness?

Eligible CEBA Loan Holders in good standing had the following terms of forgiveness:

If you borrowed $40,000 or less:
Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before the forgiveness deadline applicable to you (January 18, 2024, or March 28, 2024 if you applied to refinance your CEBA Loan at the same financial institution that originally provided your CEBA Loan on or before January 18, 2024) would have resulted in loan forgiveness of 25 percent (up to $10,000).

Example 1:
Maximum Amount Borrowed: $40,000
Amount Repaid By Applicable Forgiveness Deadline: $30,000
Available Forgiveness: $10,000

Example 2:
Maximum Amount Borrowed: $20,000
Amount Repaid By Applicable Forgiveness Deadline: $15,000
Available Forgiveness: $5,000

Example 3:
Maximum Amount Borrowed: $40,000
Amount Repaid By Applicable Forgiveness Deadline: $25,000
Available Forgiveness: $0

If you borrowed more than $40,000 and up to $60,000:
If you received a $40,000 loan and subsequently received the $20,000 expansion, the terms of your forgiveness changed and are described here.

Repaying the outstanding balance of the loan (other than the amount available to be forgiven) on or before the forgiveness deadline applicable to you (January 18, 2024, or March 28, 2024 if you applied to refinance your CEBA Loan at the same financial institution that originally provided your CEBA Loan on or before January 18, 2024) would have resulted in a single tranche of loan forgiveness up to $20,000 based on a blended rate:

• 25 percent on the first $40,000; plus
• 50 percent on amounts above $40,000 and up to $60,000.

For clarity, the portion of forgiveness based on a rate of 25% and the portion of forgiveness based on a rate of 50% are combined into a single tranche of forgiveness, which was only available if all other amounts outstanding were repaid by January 18, 2024, or March 28, 2024 if you applied to refinance your CEBA Loan at the same financial institution that originally provided your CEBA Loan on or before January 18, 2024. For example, if $60,000 was borrowed, no forgiveness was available unless $40,000 was repaid.

Note: some financial institutions may record your $40,000 loan and $20,000 expansion as two separate loans. For the purposes of loan forgiveness, borrowings and repayments on both loans were aggregated.

Example 4:
Maximum Amount Borrowed: $60,000
Amount Repaid By Applicable Forgiveness Deadline: $40,000
Available Forgiveness: $20,000 ($40,000 x 25% + $20,000 x 50%)

Example 5:
Maximum Amount Borrowed: $50,000
Amount Repaid By Applicable Forgiveness Deadline: $35,000
Available Forgiveness: $15,000 ($40,000 x 25% + $10,000 x 50%)

Example 6:
Maximum Amount Borrowed: $60,000
Amount Repaid By Applicable Forgiveness Deadline: $35,000
Available Forgiveness: $0

If you fully repaid your 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 January 18, 2024, or March 28, 2024 if you applied to refinance your CEBA Loan at the same financial institution that originally provided your CEBA Loan on or before January 18, 2024, would have resulted in loan forgiveness of 50 percent (up to $10,000).

Example 7:
Maximum amount Borrowed: $20,000
Amount Repaid By Applicable Forgiveness Deadline: $10,000
Available Forgiveness: $10,000

Example 8:
Maximum amount Borrowed: $20,000
Amount Repaid By Applicable Forgiveness Deadline: $8,000
Available Forgiveness: $0

What were the requirements to qualify for loan forgiveness?

Loan Holders in good standing that met CEBA eligibility criteria were eligible for the January 18, 2024, repayment deadline to qualify for partial loan forgiveness. Loan Holders that were eligible for the January 18, 2024, repayment deadline to qualify for partial loan forgiveness were contacted by their financial institution to confirm their eligibility.

If you were an eligible Loan Holder in good standing that submitted a refinancing loan application to the financial institution that provided your CEBA Loan on or before January 18, 2024, and required a grace period in order to finalize the payout of your CEBA Loan, you could have qualified for partial loan forgiveness if the outstanding principal of your CEBA Loan, other than the amount of potential debt forgiveness, was repaid by March 28, 2024.

CEBA eligibility criteria validations have been completed for all Loan Holders 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.

I previously received a notice from my financial institution indicating that my business is not eligible for loan forgiveness and is required to repay in full by December 31, 2023. Did the January 18, 2024, extension apply to me?

No, the extension of the repayment deadline to qualify for forgiveness to January 18, 2024, did not apply to Loan Holders that were not eligible for forgiveness. If your business was informed that it was not eligible for loan forgiveness and was required to repay its CEBA Loan in full by December 31, 2023, your repayment deadline did not change.

Does CEBA Loan forgiveness need to be reported in my income tax filing? If so, when?

The forgiveness portion of your CEBA Loan is taxable. For any other taxation questions relating to your CEBA Loan, please contact the Canada Revenue Agency (CRA) or your accountant for further information.