Repayment Tips for Canada Emergency Business Account - CEBA?

#businesssubsidies #deadlines #bookkeeping #repaymentplans

2021 is coming to an end... And there is an upcoming deadline in 2022 that we want you to remember. Your business may have applied and received the Canada Emergency Business Account Loan (CEBA) in 2020 or early 2021. The loan repayment date is approaching. To be exact the date to remember is December 31, 2022.

If your business borrowed $40,000 you’ll only have to pay back $30,000. This will be done by transferring the said amount from the business chequing/savings account into the CEBA credit card or CEBA LOC account. If your business borrowed a total amount of $60,000, only $40,000 is expected back as long as you repay by said date. The remainder of the loan will be forgiven for as long as you pay on time.

Your business may have used up the CEBA funds and as part of your upcoming projections you should figure out how much you will set aside on a regular basis so the amount due is paid on time. We recommend that you assign a separate bank account where you collect the CEBA amount to be repaid- Whenever possible start building the balance to be repaid progressively depending on your projections so it does not feel like an insurmountable task.

What happens if I do not pay the expected repayment amount? The loan will be converted into a 3 year-term at a 5% interest rate for the full amount of the loan or the amount that was unpaid by December 31, 2022. This means that if you took out only 25,000 from the CEBA account and you do not pay anything by December 31, 2022, you will be owing the full $25,000 at a 5% rate for a 3 year period. Similarly, if you took out the full $60,000 and you repay only $20,000 by December 31, 2022, you will be expected to repay the remaining $40,000 at a 5% interest rate over a three-year period.

If you need help getting your business finances organized to meet this deadline let us know.

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