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How does the CEBA Loan Repayment Work?

Written by Jessica Steer
When the COVID-19 pandemic first started, many businesses were faced with financial hardship and many had to close their doors either temporarily or permanently. Because of this the federal government came up with a solution to help those businesses who were in need of extra funds for payroll and other employment expenses. This is the CEBA. The CEBA was available to many different businesses and helped many get through the toughest part of the pandemic. Now that things are slowly getting back to normal, many CEBA receivers are starting to have to pay back their loans. The amount that needs to be repaid and the interest on that money depends on when you can make your payments, and if you can meet the government's early repayment deadline.
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    What is CEBA?

    The Canada Emergency Business Account (CEBA), loans were interest free loans up to $40,000 for small businesses and not for profit organizations. The CEBA program included two different streams: The Payroll Stream and the non-deferrable expenses stream. The loan amount was the same for each. On October 26, 2020, this amount was then increased to $60,000 and an extra $20,000 was available to those who were already approved for the original $40,000. A perk of this program, besides the fact that the loan is interest free, loan forgiveness is also offered. As long as the full amount minus the loan forgiveness was paid by the early payment date, then this applies. Recipients were able to apply up until June 30, 2021.

    These loans were available through over 220 different financial institutions. The original approval amount was $40,000 but many people qualified for an expansion of $20,000. The total amount of $60,000 is a lot of money to pay back so how exactly does that work?

    Specifics of CEBA

    The original CEBA was an interest free loan amount of $40,000 with $10,000 of the loan being forgivable if it was paid by the deadline. The loan amount was then extended for $20,000 with $10,000 of that being partial loan forgiveness as long as that was paid for by the deadline. Because of this extension, the requirements changed a little.

    In order to receive CEBA, you had to:

    • Prove your business was negatively impacted by COVID-19
    • Be a Canadian operating business that was already operating by March 1, 2020
    • Have a Federal tax registration number
    • Have a business bank account a participating institution or create one
    • Agree to participate in government surveys related to the funding after the fact
    • Intend to continue to conduct business or resume if you had to close

    In order to qualify for the CEBA you had to be:

    • A small business
    • A nonprofit organization
    • A sole proprietor
    • A business relying on contractors
    • Family-owned operations that pay with dividends, not payroll

    There are also some restrictions that came with the CEBA. Those are that the funds were not allowed to be used for refinancing of existing debt, payments of dividends or increases in pay for management. That being said, they are allowed to be used for non-deferrable expenses. Some examples of these are:

    • Payroll
    • Rent or lease payments
    • Utilities
    • Payments incurred for property taxes
    • Regularly scheduled debt service
    • Insurance related costs

    That being said, if you didn’t qualify for CEBA there were other grants and loans available such as the Regional Relief and Recovery Fund (RRRF).

    Who Was Excluded from CEBA?

    While many businesses qualified for CEBA, there were certain exclusions that did apply.

    1. Applicants couldn’t be a government organization or body, or an entity owned by one.
    2. They couldn’t be a not-for-profit, charity, union or fraternal benefit, or owned by one unless the entity earns revenue from the regular supply of property/goods and services and is run in Canada.
    3. The business couldn’t be owned by a Federal Member of Parliament or Senator.
    4. They couldn’t promote violence, incite hatred or discriminate against:
      • Gender identity or expression
      • Sex
      • Sexual orientation
      • Race
      • Religion
      • Ethnicity
      • Region
      • Education
      • Age
      • Mental or physical disability

    How Repayment Works

    Paying back the CEBA is actually fairly easy. Since it is done through a verified institution, though, it is done differently based on the bank that you are using. Basically, though, you can make payments at any time you like as long as the money you owe (minus the forgiven amounts) is paid in full by the deadline.

    As of October 13, 2022, the federal government had extended the repayment period for both the $40,000 and $60,000 loan amounts to December 31, 2023. Those who qualify for loan forgiveness met the CEBA eligibility criteria and were in good standing then had the due date extended again until January 18, 2024. If the amount owing minus the forgiveness amount isn't paid in full as of January 19, 2024, then the remaining amount will convert to a non-amortizing term loan, and the full repayment on the principal loan amount is due by December 31, 2026. The only exception is if you apply for an extension that gives you until March 28, 2024, to pay back in order to keep your loan forgiveness. In order to qualify, you must apply with your financial institution before January 18, 2024. That said, those who don't qualify for loan forgiveness still had the make their full payment by December 31, 2023.

    If the loans are paid in full minus the $10,000 if you have the $40,000 loan or $20,000 if you have the $60,000 loan, then you won’t have to pay any interest on the money borrowed. If it is not paid in full, then you will start having to pay 5% interest per year as of January 1, 2023 on the CEBA loan balance. This also means that you will have to pay the forgiven amounts back as well. Payments can be made on the last day of each month. The full amount with principal and interest is due to be repaid by December 31, 2025.


    In order to pay back your CEBA amount with RBC, all you need to do is transfer the money through your mobile app or through online banking. You can also have it set up so money comes out automatically every month. You can also make payments through RBC express and ATM’s.

    As long as your loan amount minus the forgiveness amount is paid in full by December 31, 2023, the forgiveness amount will be automatically applied and the loan will be closed. Even if it takes until the end of 2025, your loan will be closed once the outstanding balance has been paid in full.


    If your CEBA loan is with TD, you can make your payments online as well. They can be done online or through the app from your TD Business Account. Many people choose to set up automatic monthly payments.

    Just like RBC, TD keeps an eye on your account. Once 75% of the loan amount has been paid by Dec 31, 2023, then the other 25% of the loan is forgiven and it is closed. After that period, payments are due once a month until the loan is paid off. It also must be paid by December 31, 2025.


    In order to pay back your CEBA loan with BMO, you need to add your loan to your online banking. You can then make transfers of any amount you choose when you choose. Once the transaction has been approved then it is reflected on your loan balance.

    Just like other banks, the deadline to apply was June 30, 2021 and the deadline to make payments without penalty is December 31, 2023. After that interest is applied on the remaining balance including the original forgiven amount. You then have until December 31, 2025 to pay in full. Payments are also required monthly.


    At CIBC, CEBA loan repayment is similar to that of the other banks. How it works is that you can make payments interest free until December 31 ,2023 as any time you like through a CIBC advisor or your online banking. If the repayment is made in full by this date then the forgiven amounts apply.

    If your loan is not repaid in full by this time, it is then converted into a 2 year loan. You will then be set up to make monthly only interest payments of 5% per year, but the loan amount will be due in full by December 31,2025. So, even though your interest amounts will be automatic, you will still need to make principal payments. You can speak with your advisor on how the best way for you would be to do this.


    With Scotiabank, you are able to make your loan payments online. The loan will show up as “ScotiaLine for Business VISA” and you can make payments online whenever you want to. The deadlines for the CEBA loan are the same as at the other banks. The loan must be paid by December 31, 2023 in order to avoid interest and be eligible for the forgiveness portions. Interest payments will start monthly as of January 1, 2024 and the full balance must be paid by December 31, 2025.

    Personal Liability and CEBA

    If your loan payments are not made in full by the required deadline then you are considered to be personally responsible if you are a sole proprietor. You are given some time to pay back the loan whether you meet the early repayment date or not. Originally, the early repayment date was December 31, 2022, but you now have an extra year.

    If you think there is no way you can make your payments in full by Dec 31, 2025, it would be best to discuss it with the financial institution you have the loan with or contact the CEBA call center. They will be able to help you work through your options, and the more time you give yourself, the more detailed of a plan you can make for yourself. There is still time to make your payments.


    The CEBA program was created to help small businesses whose income was directly impacted by the COVID-19 pandemic. This loan was either $40,000 or $60,000 and allowed the recipient to avoid interest and even have a portion of the loan forgiven as long as it is paid back in time. Overall, there were 898, 271 Canadian businesses that were approved for the CEBA loan. 571,871 of those businesses were also approved for the $20,000 expansion. In total, $49.2 billion was given out in CEBA loans.

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