CEBA Loans Program

Repaying the outstanding balance of the loan (other than the amount available to be forgiven) between November 1, 2022 and January 18, 2024 will result in loan forgiveness up to $20,000. The loan forgiveness amount is dependent on how much you borrowed in total.

Please note: If you received both an original loan and an expansion loan, the terms of forgiveness have changed.

The forgiveness calculation is now applied to the total loan amount. If 75% is repaid on the first $40,000 AND 50% is repaid on the next $20,000, a portion of the loan will be forgiven as follows:

• 25% on the first $40,000; plus:

• 50% on the next $20,000.

For clarity please see the following examples:

Example 1:      

Initial Amount Borrowed: $40,000 + $20,000 expansion = $60,000.

Required Repayment by January 18, 2024 (in order to qualify for forgiveness: $40,000.

Forgiveness Calculation: = ($40,000 x 25%) + ($20,000 x 50%)

                                    =$20,000

Example 2:      

Initial Amount Borrowed: $35,000 + $20,000 expansion = $55,000

Required Repayment by January 18, 2024 (in order to qualify for forgiveness): $37,500.

Forgiveness Calculation: =($40,000 x 25% + ($15,000 x 50%)

                                    =$17,500

Example 3:       

Initial Amount Borrowed: $30,000 + $20,000 = $50,000

Required Repayment by January 18, 2024 (in order to qualify for forgiveness): $35,000.

Forgiveness Calcuation: =($40,000 x 25%) + ($10,000 x  50%)

                                   =$15,000

Example 4:      

Initial Amount Borrowed: $20,000 + $20,000 expansion = $40,000

Required Repayment by January 18, 2024 (in order to qualify for forgiveness: $30,000.

Forgiveness Calculation: =($40,000 x 25%)

                                    =$10,000

Example 5:

Initial Amount Borrowed: $15,000 + $20,000 expansion = $35,000

Required Repayment by January 18, 2024 (in order to qualify for forgiveness): $26,250.

Forgiveness Calculation: =($35,000 x 25%)

                                    =$8,750

Example 6:

Amount borrowed: $60,000

Required Repayment by January 18, 2024 (in order to qualify for forgiveness): $40,000

Forgiveness Calculation: =($40,000 x 25%) + ($20,000 x 50%)

                                    =$20,000

INITIAL TERM

There is no prescribed minimum payment amount (principal or interest) or payment schedule from the Date of Loan Advance to January 18, 2024 (the “Initial Term”).  

If you repay a specified Principal Amount on or prior to the end of the Initial Term, a forgiveness amount will be applied to your loan (see FAQ regarding loan forgiveness above).

EXTENSION PERIOD

If you do not repay the specified Principal Amount on or before January 18, 2024, your loan will be extended and you will be obligated to repay your full balance by December 31, 2026. During this time you are obligated to make monthly minimum interest payments, on the outstanding Principal Amount, at the Extension Fixed Rate of 5%.  Your first minimum interest payment is due February 16th, 2024. Your payment frequency is monthly. There is no prescribed minimum Principal Amount payment during the Extension Period.  You may make Principal Amount payments at the time of your discretion.  You must fully repay the Loan Amount plus any accrued interest on or before the Balance Due Date.

Yes, all required application documents must be submitted to KSCU by end of day January 18, 2024. Once all documents are received the application is considered to be “received” and a confirmation email will be sent from our Commercial team. We will then review your application to determine if the loan is approved or declined.

If all required documents aren’t sent in by January 18 the application will not be considered “received” and will not be processed, and  forgiveness extension to March 28th, 2024 will not be granted. 

Due to the amount of time it takes to process a CEBA Conversion Loan application there is a chance that your new loan, if approved, may not be funded by January 18, 2024. You’re existing CEBA loan (of up to $60,000) will be rolled into a temporary loan at 5% until the CEBA Conversion Loan is funded. The CEBA Conversion Loan would then pay out this temporary loan and applicable forgiveness.

Please email or call your lender directly or our Member Service Center at 1.800.665.5728 and they will transfer you to your lender. Please have your lenders name ready when calling the Member Service Centre.

Yes, the forgiveness portion of your CEBA loan is taxable. Please contact the CRA or your accountant for further information.

Yes, all CEBA loan holders are required to repay their loan in accordance with the repayment terms in your loan documents.

     Loans are considered to be in default if 90 days of interest isn’t paid. Initially KSCU will follow a typical collections process whereby the borrower is notified of their loan being in default. Ultimately CRA will be responsible for collecting on CEBA loans and outstanding interest that is not repaid.

 

Export Development Canada is a Crown Corporation that is facilitating the CEBA program development and implementation between the Government of Canada and financial institutions all across the country.