CEBA Loan Repayment: What to Do If You Can’t Pay It Back

The COVID-19 Economic Response Plan’s Canada Emergency Business Account (CEBA) was a lifeline for many Canadian businesses during the pandemic. However, as the repayment deadlines approach, some borrowers are finding themselves in difficult financial situations. If you’re struggling to repay your CEBA loan, here’s a guide on what you can do:

Understand the Collection Process 

If you’re unable to repay your CEBA loan in full, it may be assigned from your financial institution to the CEBA program for collection. The Canada Revenue Agency (CRA) has been actively involved in this process since Spring 2024. Here’s how it works:

• Assignment Notification: You will receive a loan assignment notice by mail. This notice will include details on how to make payments and set up a payment arrangement with the CRA.
• CEBA Portal: A 12-digit CEBA identification number, starting with “967,” will be issued. Use this number to register for a CEBA portal account where you can view your outstanding balance, payment history, and monthly statements.
• Payment Order: Payments are applied in the following order: fees outstanding, interest outstanding, principal outstanding, and finally, interest accrued.

Setting Up a Payment Arrangement

If repaying the full amount immediately is not feasible, you can set up a payment arrangement with the CRA. Here’s how:

• Contact CRA: You can initiate communication by contacting the CRA CEBA contact centre at 1-800-361-2808. Alternatively, the CRA may contact you to arrange payment terms.
• Authorized Third Parties: If you have a family member, accountant, or lawyer handling your affairs, they can request information about the loan through the general CEBA call centre at 1-888-324-4201. However, they cannot access your CEBA portal account.

Handling Special Situations

Different circumstances may affect how you handle your CEBA loan:

• Business Closure: Even if your business has closed, you are still required to repay the loan.
• Ownership Changes: The impact of a change in ownership depends on your business’s legal structure. Contact the general CEBA call centre for more details.
• Insolvency or Bankruptcy: If your business is insolvent, bankrupt, or in receivership, the CEBA program does not provide insolvency advice. The appointed licensed insolvency trustee should contact the CEBA call centre.
• Deceased Sole Proprietors: If the borrower has passed away, the executor of the estate must follow a validation process, including submitting a death certificate and will, to manage the loan.

Proactive Communication

Don’t wait for the CRA to contact you. If you’re experiencing difficulties, reach out proactively. Establishing a reasonable repayment schedule early can help avoid additional penalties and stress.

Navigating the repayment of a CEBA loan can be challenging, but understanding the process and communicating with the CRA can alleviate some of the burden. If you find yourself struggling, consider contacting us to help manage your repayment and explore possible options.