CEBA Loans Program

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.

Funds must be used to fun working capital needs and may not be held in a savings account or term deposit. The loan is to be used to fund non-deferrable expenses. A seperate FAQ below lists all Eligible Non-Deferrable Expenses.

INITIAL TERM

There is no prescribed minimum payment amount (principal or interest) or payment schedule from the Date of Loan Advance to December 31, 2023 (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 below).

EXTENSION PERIOD

If you do not repay the specified Principal Amount on or before December 31, 2023, your loan will be extended and you will be obligated to repay your full balance by December 31, 2025. 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 January 31, 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.

Repaying the outstanding balance of the loan (other than the amount available to be forgiven) between November 1, 2022 and December 31, 2023 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 December 31, 2023 (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 December 31, 2023 (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 December 31, 2023 (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 December 31, 2023 (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 December 31, 2023 (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 December 31, 2023 (in order to qualify for forgiveness): $40,000

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

                                    =$20,000

In the effort to get CEBA funds out to small businesses as quickly as possible the first set of checks, called pre-funding validations, were completed by the Government and CRA. After loans were funded, further checks were completed, and are called post-funding validations. Post-funding validations are ongoing by the Government of Canada.

CEBA applicants agree that the government may conduct audits to confirm the nature of the expenses applicants use to establish their eligibility for CEBA, and acknowledge that inaccuracies may lead to legal consequences.

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.

Principal payments are optional at this time and interest payments are not in effect until January 2024. At KSCU the optional principal payments are processed on the 10^th day of each month, but you can call the Member Service Centre or contact your Commercial Lender at any time to organize this principal repayment.