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 lisst 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, 2022 (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). The earliest date that you can being repaying principal at KSCU is November 1, 2022.

EXTENSION PERIOD

If you do not repay the specified Principal Amount on or before December 31, 2022, 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, 2023. 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, 2022 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 at least 75% is repaid on the first $40,000 AND at least 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, 2022 (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, 2022 (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, 2022 (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, 2022 (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, 2000 (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, 2022 (in order to qualify for forgiveness): $40,000

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

                                    =$20,000

Payments to the loan (in whole or in part) cannot be made until November 1, 2022.

The 0.00% interest period on loans under the CEBA program lasts until December 31, 2022 and there are no costs to the member in order to hold the funds until that date.

Unfortunately we cannot pay out a CEBA loan until November 1, 2022. We must leave your share account, chequing account and CEBA loan active until that time.

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. Any post-funding validation issues will be addressed in 2021.

There are only a small number of loans with post-funding validation anomalies. EDC is currently delivering a remediation and reclassification process that will help address many of these issues. If you received a decline on your expansion loan, we will get in touch with you when the Government notifies us to do so.

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.