CEBA loan repayment: the 31 December 2026 deadline and your options
What is still owed on a Canada Emergency Business Account loan in late 2026, how the 5% term loan works, the arithmetic of repaying, and how to refinance or ask for help.
If your business still has a balance on a Canada Emergency Business Account (CEBA) loan, it must be repaid in full by 31 December 2026. Loans that were not repaid by the forgiveness deadline in January 2024 (or by 28 March 2024 for businesses that had applied to refinance with their lender by 18 January 2024) lost the partial forgiveness and became term loans at 5% interest a year, with interest-only payments until the final repayment date. As of October 2026 the federal government has not announced a further extension, so plan for repayment, refinancing or a conversation with your lender now rather than in December.
This guide is part of the small business loan requirements and rates overview. Check the terms that apply to your loan with the financial institution that holds it and on the official CEBA website.
How CEBA got here
| Stage | What happened |
|---|---|
| 2020–2021 | Interest-free loans of up to $40,000, later expanded to $60,000, made through the business's own bank or credit union and backed by the federal government; Export Development Canada administers the program |
| Original forgiveness | Repaying the non-forgivable part on time meant up to 25% forgiveness on a $40,000 loan ($10,000) or 33% on a $60,000 loan ($20,000) |
| Deadline | Extended from the end of 2022 to 18 January 2024, with the refinancing extension to 28 March 2024 |
| After the deadline | Remaining balance became a term loan at 5% a year from 19 January 2024, with full repayment due 31 December 2026 |
The arithmetic of what you owe
Example (illustrative). A restaurant has a full $60,000 CEBA balance that it did not repay by the forgiveness deadline.
- Interest at 5%: $60,000 x 5% = $3,000 a year, or $250 a month on an interest-only basis.
- From 19 January 2024 to 31 December 2026 is 1,077 days, so total interest over the period is about $60,000 x 5% x 1,077 / 365 = $8,852, assuming interest-only payments and no principal repaid.
- On 31 December 2026 the whole $60,000 principal (plus any unpaid interest) is due.
The 5% rate was cheap compared with most small business credit, which is why many businesses kept the balance. The problem is the lump sum at the end.
Your options before the deadline
1. Repay from cash. If cash flow allows, repaying early saves 5% on the amount repaid and removes the year-end risk. Check whether your lender allows partial prepayments; most CEBA term loans can be prepaid without penalty, but confirm.
2. Refinance into a term loan. Your bank, a credit union or BDC may lend to repay CEBA. Expect a commercial rate, well above 5%.
| Refinancing a $60,000 balance (illustrative) | Monthly payment | Interest over the loan |
|---|---|---|
| 5-year term loan at 8.5% | about $1,231 | about $13,860 |
| 3-year term loan at 9.5% | about $1,922 | about $9,190 |
A business that has been paying $250 a month of CEBA interest needs to absorb a payment of $1,200–1,900. Check the payment calculator with real offers, and work out whether the business can carry it using the debt service coverage ratio example.
3. Combine with other borrowing. If you are applying for an equipment or expansion loan anyway, include the CEBA payoff in the request, so the lender sees one complete picture.
4. Talk to your lender before you miss anything. If neither repayment nor refinancing is realistic, contact the financial institution that holds the loan before the deadline and ask what it can do. Do not assume an extension; lenders follow the program's terms.
If you cannot repay
An unpaid CEBA balance after 31 December 2026 is a loan in default. The lender, and the government agencies behind the program, can take collection steps, and a default can affect your other credit with the same lender. If the business has other serious debts:
- Speak to a Licensed Insolvency Trustee about a proposal under the Bankruptcy and Insolvency Act, which can restructure unsecured debts, including government-backed loans, while the business keeps operating.
- For sole proprietors, the CEBA debt is your personal debt; for corporations, it is the corporation's debt unless you guaranteed it. CEBA loans were generally made without personal guarantees, but check your own documents.
See covenant breach and default for how lenders enforce and what a proposal involves.
Tax points to raise with your accountant
The forgivable portion of CEBA was generally treated as taxable income in the year the loan was received, and businesses that later lost forgiveness by not repaying on time could generally claim a deduction when they repaid that amount. Interest at 5% on the term loan is generally deductible if the loan was used to earn business income. The timing and amounts depend on how your returns were filed, so ask a CPA and check the Canada Revenue Agency's guidance on CEBA.
A CEBA checklist for late 2026
- Find your current balance and payment terms from your lender's statement or online banking.
- Confirm the exact final repayment date and how to pay.
- Decide by mid-November whether you will repay, refinance or need to negotiate.
- If refinancing, apply now with the documents in the application checklist; lenders are busy in December.
- Keep records of repayment for your accountant.
Frequently asked questions
Can I still get the forgiveness if I pay now?
No. Forgiveness required repayment by the 2024 deadlines. Paying now reduces interest and the year-end lump sum, but the full balance is owed.
Will the deadline be extended again?
As of October 2026 no extension has been announced. Watch the official CEBA website and your lender's notices, and plan on 31 December 2026.
Does a CEBA balance count against me when I apply for a new loan?
Yes. Lenders include it in your debts. A lender may be more comfortable if the new loan includes the CEBA payoff.
Who do I contact about my CEBA loan?
The bank or credit union that made the loan. The official CEBA website has general program information and contacts.
Sources
- Canada Emergency Business Account — official program information
- Department of Finance Canada — announcements on CEBA terms
- Export Development Canada — program administrator
- Canada Revenue Agency — tax treatment of CEBA
- Office of the Superintendent of Bankruptcy — finding a Licensed Insolvency Trustee
