TORONTO — There’s some relief for the travel industry today amid news of an extension for the federal government’s Canadian Emergency Business Account (CEBA) loans.
Announced yesterday, the federal government is extending deadlines for CEBA loan repayments, providing an additional year for term loan repayment, and additional flexibilities for loan holders looking to benefit from partial loan forgiveness of up to 33%.
As the government notes on its site, the CEBA program was available from April 9, 2020, to June 30, 2021, and provided $49 billion in interest-free, partially forgivable loans of up to $60,000 to nearly 900,000 small businesses and not-for-profit organizations to help cover their operating costs during the pandemic.
The repayment deadline for CEBA loans to qualify for partial loan forgiveness of up to 33% is being extended from Dec. 31, 2023, to Jan. 18, 2024. It comes on the heels on the government’s previous one-year extension announced in January 2022.
For CEBA loan holders who make a refinancing application with the financial institution that provided their CEBA loan by January 18, 2024, the repayment deadline to qualify for partial loan forgiveness now includes a refinancing extension until March 28, 2024.
Here’s where the year-long extension comes in: as of Jan. 19, 2024, outstanding loans, including those that are captured by the refinancing extension, will convert to three-year term loans, subject to interest of 5% per annum, with the term loan repayment date extended by an additional year from Dec. 31, 2025, to Dec. 31, 2026.
Repayment on or before the new deadline of January 18, 2024 (or March 28, 2024 if a refinancing application is submitted prior to January 18, 2024 at the financial institution that provided their CEBA loan), will result in loan forgiveness of $10,000 for a $40,000 loan and $20,000 for a $60,000 loan.
All of these details are outlined on the government’s site, found here.
Many travel agencies and other travel businesses took out CEBA loans to get through the pandemic, and frustrations with the looming deadlines have been mounting. Industry organizations including ACTA have long been calling for deadline extensions. For full coverage of yesterday’s ACTA Summit, click here.