CEBA borrowers advised to consider refinancing options as repayment deadline looms

January 18 marks the date by which repayment is required

CEBA borrowers advised to consider refinancing options as repayment deadline looms

As the January 18 deadline looms for the repayment of loans from Canada's Emergency Business Account (CEBA) program, concerns are rising over the potential impact on struggling businesses, according to Dan Kelly, president of the Canadian Federation of Independent Business (CFIB).

Launched in 2020 by Ottawa, the CEBA program aimed to assist businesses grappling with financial challenges by providing loans of up to $60,000 CAD. The federal government promised to forgive up to $20,000 CAD if borrowers could repay by a specified date.

However, facing a grim economic outlook, rising costs, and lingering pandemic-induced debt, a significant number of Canadian businesses find themselves unable to meet this impending deadline. Kelly notes that the banks are hesitant to extend further credit “because their balance sheets are not in order.”

“This is literally the straw that will break the backs of thousands and thousands of businesses,” said Kelly.

According to Kelly, between one-fifth and one-third of companies are in danger of missing the loan forgiveness deadline, adding further strain to their financial woes.

Both Kelly and David Gens, CEO of FinTech lender Merchant Growth, said it’s unlikely Ottawa will extend the deadline for partial loan forgiveness.

“We’ve just got to be realistic at this point,” said Gens, pointing out that those who have been the most proactive in meeting this obligation are “effectively going to be punished if the deadline is extended again.”

In response, Finance Ministry spokesperson Katherine Cuplinskas highlighted that the additional two months provided for businesses is intended to support struggling businesses facing difficulties meeting the January deadline. Cuplinskas said that Ottawa, acknowledging the challenges, granted an extension until March 28 for borrowers seeking to refinance.

Since the program's initiation, nearly 900,000 firms have taken advantage of CEBA loans, with the government disbursing over $49 billion CAD. Businesses struggling to meet the January deadline still have until December 31, 2026, to repay, but interest at a 5% rate will begin accruing after the 18th.

Data from the Canadian Chamber of Commerce indicates that about 28% of businesses have repaid their CEBA loans, while 66% of outstanding loan holders expect to repay by the end of 2026. However, 15% have expressed uncertainty about their liquidity or access to credit, while the circumstances of an additional 19% are still unknown.

Various fintech lenders, including Swoop Funding, OnDeck, and, are promoting CEBA options alongside Merchant Growth. Major banks are now also offering refinancing alternatives to their clients.

Merchant Group announced late last year it had secured a $300 million forward flow facility from Fortress Investment Group to aid companies in refinancing their CEBA loans.

Kelly pointed out a challenge with “alternative lenders,” noting that Ottawa requires borrowers to apply for refinancing with their original institution before the deadline, although they are not required to accept those terms. Kelly added that some alternative financing options carry excessively high interest rates, urging businesses to carefully consider their options.

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