The CEBA loan helped hundreds of thousands of Canadian small businesses get through one of the most challenging periods in recent history. In total, 898,271 businesses were approved for CEBA loans, with 571,851 also receiving expansions, representing $49.2 billion in approved funding. For many owners, this support covered payroll, rent, and essential operating costs when revenue slowed or stopped altogether. It was designed as short-term relief, but for many businesses, it has become a longer-term financial commitment that still sits on the balance sheet today.
Now, the conversation around CEBA has shifted. Instead of emergency funding, it is about repayment, planning, and how this loan fits into the overall health of a business. Owners are thinking about cash flow, future growth, and how to manage obligations without creating unnecessary strain.
This article walks through how CEBA loans work today, what changed after the forgiveness period ended, what the repayment timeline means, and how businesses can approach this in a calm and practical way.
Key Takeaways
- CEBA loans that were not repaid by early 2024 are now term loans due at the end of 2026
- Partial loan forgiveness was available for businesses that met earlier repayment deadlines
- Interest applies during the remaining loan term
- If unpaid, CEBA loans may eventually be transferred to CRA collections
- Planning early creates more flexibility than waiting until the final repayment period
What Is a CEBA Loan?
The CEBA loan, short for the Canada Emergency Business Account, was a federal pandemic relief program that provided interest-free loans to small businesses through their financial institutions. Its purpose was simple: help businesses cover essential expenses and continue operating during the severe disruptions caused by COVID-19.
Businesses could initially access $40,000, with many later eligible for an additional $20,000, bringing the total possible loan to $60,000. These funds were backed by the Government of Canada and delivered through banks and credit unions, which made the program widely accessible at a critical time.
Today, CEBA is no longer about accessing support. For many businesses, it is now an existing loan balance that needs to be managed as part of regular financial planning. That shift from emergency relief to long-term obligation is why many owners are revisiting their CEBA loan and thinking about how they fit into their overall cash flow and future goals.
How CEBA Loan Forgiveness Worked and What Changed After the Deadlines
CEBA included a partial loan forgiveness feature designed to reward businesses that could repay most of their loan within a set timeframe. Businesses that received the original $40,000 loan could have up to $10,000 forgiven, while those that accessed the expanded $60,000 loan could qualify for up to $20,000 in forgiveness. In practical terms, this meant a portion of the loan could turn into a non-repayable grant if the remaining balance was paid back on time.
The key deadlines for forgiveness were tied to early 2024. The original deadline to repay and retain forgiveness was January 18, 2024. Businesses that had arranged refinancing and formally applied by that date were given a short extension, with a final forgiveness deadline of March 18, 2024. Once those dates passed, the forgiveness opportunity closed.
Another important shift happened at the same time. Starting January 19, 2024, any outstanding CEBA loan balance began accruing interest at 5% per year. Loans that were not repaid by the forgiveness deadline automatically transitioned into term loans, which changed how they function from that point forward.
For businesses, this marked a turning point. CEBA was no longer an interest-free emergency support program with a grant component. It became a standard business liability that carries interest, affects cash flow planning, and needs to be managed like other debt. The cost of holding the balance now grows over time, which is why many owners are reassessing how CEBA fits into their financial strategy.
CEBA Loan Repayment Timeline and What Applies Now
At this point, CEBA is less about the program itself and more about how it fits into the everyday financial rhythm of your business. It is one of several commitments that need to be balanced alongside payroll, suppliers, rent, and growth plans. The focus now is not on what the loan was, but on how to manage it in a way that supports stability rather than strain.
The final CEBA loan repayment date is December 31, 2026. While there is still time, the balance is not standing still. Interest continues to accrue, which means the longer the loan remains outstanding, the more it affects overall repayment cost and cash-flow planning.
For many business owners, the shift is mental as much as financial. CEBA is no longer about eligibility or forgiveness rules. It is about timing, cash flow, and strategy. Owners are looking at how repayment aligns with seasonal revenue, hiring plans, expansion goals, or other financial priorities over the next year.
CEBA Loan Repayment Terms and What Applies Now
For businesses that did not repay their CEBA loan by the applicable forgiveness deadline, the loan has now converted into a three-year term loan ending December 31, 2026. The repayment structure is standardized under the federal program and does not vary meaningfully by financial institution.
Under the current terms, interest accrues at 5% on the full outstanding balance of the loan, including any amount that was previously forgivable. Businesses are required to make monthly interest payments during the term. The full principal balance does not need to be repaid until the maturity date of December 31, 2026.
As it stands now, businesses with a converted CEBA term loan must budget for ongoing monthly interest payments while preparing to repay the full principal by the end of 2026. While borrowers may choose to repay principal early, the minimum required payments during the term are the monthly interest charges. Understanding this structure is key to planning cash flow and avoiding surprises at maturity.
Are CEBA Loans Personally Guaranteed?
In most cases, CEBA loans were not personally guaranteed in the traditional sense. A personal guarantee usually means that if the business cannot repay a loan, the owner becomes personally responsible, and their personal assets could be used to cover the debt. CEBA was structured differently. It was a government-backed business loan delivered through financial institutions, and most borrowers were not required to sign a standard personal guarantee.
However, this does not mean the obligation disappears if the loan is not repaid. The CEBA balance remains a legal responsibility of the business itself. If payments are missed and the account becomes delinquent, the file may move into collections. This can affect the business’s credit profile, make it more difficult to secure future financing, and create additional operational stress as recovery efforts begin.
If the loan progresses to CRA collections, the agency may use its standard recovery processes, which can include contacting the business to arrange payment and taking formal steps to recover the balance. While these situations are manageable, they are much easier to address when business owners stay aware of their loan status and plan ahead rather than reacting once the account has escalated.
What Happens to a CEBA Loan If a Business Closes in Canada?
Closing a business does not automatically erase a CEBA loan balance. Even if operations stop, the loan remains an outstanding obligation that still needs to be addressed. Many business owners assume that shutting down the company ends all financial responsibilities, but government-backed loans like CEBA continue to exist beyond the day-to-day life of the business.
If the balance is not repaid or arrangements are not made, the loan may move into collections. Over time, unresolved accounts can be transferred for recovery, and in some cases may be handled through CRA collections processes. This can add stress at a time when owners are already dealing with the challenges of closing a business, which is why understanding the situation early is helpful.
The most important step for businesses facing closure or financial difficulty is communication. Speaking with the lender or seeking professional advice early can create more options and reduce uncertainty. Even when a business is winding down, having a clear picture of outstanding obligations allows owners to make informed decisions rather than reacting under pressure later.
CEBA Loan Collections: What Happens if It Goes to CRA
When a CEBA loan reaches the collections stage, the experience changes from routine loan management to a more formal recovery process. Communication typically becomes more structured, timelines may feel less flexible, and the focus shifts to resolving the outstanding balance rather than ongoing account management.
For a business, this can create practical challenges. Collections activity can affect access to future financing, influence credit relationships, and add administrative pressure at a time when attention is needed elsewhere in the business. Even when a resolution is possible, handling the situation later in the process usually involves fewer options than addressing it earlier.
The takeaway here is about positioning, not urgency. Businesses that understand their repayment timeline and consider their options before reaching this stage tend to have more control over how the loan is handled. Planning ahead helps keep CEBA as a financial decision rather than a reactive situation.
Why Your CEBA Loan Is Now a Planning Decision, Not Just a Deadline
The CEBA loan is no longer a short-term crisis tool tied to the pandemic. For many businesses, it now sits alongside other financial commitments and needs to be viewed in the context of overall business planning. That means looking at it the same way you would evaluate equipment financing, operating expenses, or other forms of debt that affect cash flow over time.
Instead of focusing only on the repayment date, business owners can look at how CEBA fits into the bigger picture.
- Will repaying the loan in one lump sum create pressure on working capital?
- Does the timing of repayment overlap with hiring plans, inventory purchases, or expansion goals?
- Could adjusting how the loan is handled provide more stability while the business continues to grow?
Thinking about CEBA in this way changes the conversation. It moves from a deadline-driven mindset to a strategy-focused one. When the loan is considered as part of broader financial planning, it becomes something that can be managed deliberately rather than something that feels like it is hanging in the background.
Exploring CEBA Loan Refinancing as a Cash Flow Strategy
When CEBA first launched, refinancing was often discussed as a way to access forgiveness. Today, the conversation looks different. For many businesses, refinancing is less about deadlines and more about managing how the loan fits into ongoing operations and financial stability.
Refinancing can mean replacing the CEBA balance with another form of financing that better matches how the business earns and spends money. Instead of facing a single large repayment or carrying a growing interest balance, some owners look for a structure that spreads payments out in a more predictable way. This can make cash flow easier to manage, especially for businesses with seasonal revenue or uneven income cycles.
Another reason refinancing comes up is operating flexibility. Carrying a CEBA balance while also managing inventory, payroll, or expansion costs can tighten working capital. Adjusting how that debt is structured may allow a business to keep more liquidity available for day-to-day operations rather than tying up cash in one obligation.
For businesses concerned about future collections pressure, refinancing can also create a clearer repayment path. Moving the balance into a structured financing solution can reduce uncertainty and help owners stay in control of the timeline rather than reacting later.
This does not mean refinancing is the right step for every business. Costs, timing, and overall financial health all matter. The value is in understanding the option early, comparing it with other strategies, and choosing the path that best supports stability and growth. Having the conversation sooner simply gives businesses more room to make thoughtful decisions instead of rushed ones.
What Businesses Can Do Now Without Rushing
Even though there is still time in the CEBA repayment period, taking a few simple steps now can make the path ahead feel much more manageable. The goal is not to make immediate decisions, but to understand where things stand so there are no surprises later. When you have clarity, you gain flexibility and can approach repayment from a position of control rather than pressure.
Some practical starting points include:
- Review your current CEBA loan balance so you know exactly what remains outstanding
- Confirm your repayment structure and timeline with your financial institution
- Forecast your cash flow over the coming months to see how repayment fits alongside payroll, inventory, and other expenses
- Consider how repayment timing aligns with business plans, such as hiring, expansion, or equipment purchases
- Speak with an accountant or financial advisor to understand the impact on your overall financial picture
- Start exploring options early, even if you are not ready to act yet
These steps are about awareness, not urgency. Businesses that take the time to understand their position tend to feel more confident and have more options available. A little preparation now can turn CEBA from an open question into a manageable part of your financial plan.
From CEBA Uncertainty to Clarity
There is still time in the CEBA repayment period, and time is most valuable when it is paired with a plan. For many businesses, the challenge is not understanding that the loan needs to be repaid. It is figuring out how that repayment fits alongside everyday operating needs, future investments, and overall cash-flow stability.
Merchant Growth works with Canadian small businesses by providing flexible term financing designed to support real-world cash-flow needs. Funding can be delivered in as little as 6 hours, giving businesses fast access to working capital when timing matters. Whether the conversation is about understanding how CEBA affects working capital, exploring ways to manage repayment more smoothly, or simply reviewing financing options to avoid strain, the focus is on helping owners make informed, confident decisions based on their specific situation.
If you have questions about your CEBA loan or want to see what your options could look like, connecting with Merchant Growth can be a helpful starting point. A conversation does not mean committing to a solution. It means gaining clarity, understanding what is available, and choosing a path that supports your business’s stability and growth.
