Business and Operations
Canada extends loan forgiveness repayment deadline for CEBA
By Bakers Journal
By Bakers Journal
Ottawa – The repayment deadline for Canada Emergency Business Account loans to qualify for partial loan forgiveness is being extended from December 31, 2022, to Dec. 31, 2023, for all eligible borrowers in good standing.
This extension will support short-term economic recovery and offer greater repayment flexibility to small businesses and not-for-profit organizations, many of which are facing continued challenges due to the pandemic, the federal government said in a news release. Repayment on or before the new deadline of Dec.31, 2023, will result in loan forgiveness of up to a third of the value of the loans (meaning up to $20,000).
Outstanding loans would subsequently convert to two-year term loans with interest of five per cent per annum commencing on Jan. 1, 2024, with the loans fully due by Dec. 31, 2025.
The government is also announcing that the repayment deadline to qualify for partial forgiveness for CEBA-equivalent lending through the Regional Relief and Recovery Fund is extended to Dec. 31, 2023.
Restaurants Canada welcomed this change in policy and said it responds to one of its key recommendations to the federal government to help hard-hit foodservice businesses survive and recover from the ongoing COVID-19 crisis.
The organization said it will continue to work with the federal government toward measures such as permanently extending the current temporary amendments to the eligibility requirements for the rent and wage subsidies under the Local Lockdown Program and expanding the eligibility threshold for funds through the Tourism and Hospitality Recovery Program for businesses not subject to lockdown or capacity restrictions, starting at 10 per cent (instead of 40 per cent) revenue decline, with a wage subsidy rate that is calculated as 1.2 times the percentage decline in sales up to a maximum of 75 per cent.
Read the full statement on Restaurant Canada’s website.