The last year or so has been a challenging time for many businesses, big and small. In an effort to support small businesses during the COVID-19 pandemic, the Canadian government launched the Canada Emergency Business Account (CEBA) in March 2020. The program offered interest-free loans of up to $40,000 to eligible small businesses to help cover operating costs during the economic downturn. Since its launch, the CEBA program has undergone a few changes. However, one key question on the minds of many small business owners is whether or not CEBA has been extended. In this post, we will discuss the current status of CEBA and what you need to know about its loan repayment and refinancing options.
As of June 30, 2021, the CEBA program is no longer accepting new applications. However, if you have already received a CEBA loan, you may still be eligible for loan forgiveness. To qualify for loan forgiveness, you must have repaid at least 75% of the original loan amount by December 31, 2022. If you meet this condition, a portion of your CEBA loan will be forgiven. It’s important to note that if you don’t meet the repayment requirements, your outstanding balance will convert to a three-year term loan at an interest rate of 5%.
If you are struggling to meet the repayment deadline or would like to refinance your CEBA loan, you may want to consider applying for the Highly Affected Sectors Credit Availability Program (HASCAP). This new program was launched earlier this year to provide loans of up to $1 million to businesses in sectors that have been hit hard by the pandemic, such as hospitality, tourism, and entertainment. To be eligible for HASCAP, you must have a minimum of $100,000 in annual payroll and be able to demonstrate a year-over-year revenue decline of at least 50% in three months, within the eight months prior to your application.
If you are not eligible for HASCAP, there are still other options available to you. You may want to consider refinancing your CEBA loan by applying for a regular business loan with your financial institution. Some banks and credit unions are offering special loan programs with attractive rates for small businesses. Alternatively, you may also consider negotiating a payment plan with your lender. Many lenders have been willing to work with customers to come up with a plan that suits their needs.
If you are unsure about how to repay your CEBA loan or would like more information on the program, you can check with your financial institution. Most banks and credit unions have dedicated help centers to assist small businesses with their CEBA inquiries. You can also visit the Government of Canada’s CEBA website, which provides detailed information on the program, including eligibility requirements, application process, and loan repayment options.
In conclusion, although the CEBA program is no longer accepting new applications, many small businesses are still benefiting from interest-free loans. If you have already received a CEBA loan, it’s important to ensure that you meet the loan repayment requirements to qualify for loan forgiveness. If you are struggling to meet the deadline, you may consider refinancing or negotiating a payment plan with your lender. Additionally, the HASCAP program may be another option to provide your small business with much-needed financial support during these challenging times. Remember to check with your financial institution or the Government of Canada’s CEBA website for more information and assistance.