Updated – CEBA Refinancing Program: Save up to $20K and then some

Written By Christian Richard

14 June 2023
Advice
Blog
Business Credit
Business Financing
Canada

The CEBA loan program’s repayment deadline is coming. Set for January 18, 2024, small businesses can take advantage of up to $20,000 in loan forgiveness, but only if they repay their loan in full by the deadline. For many Canadian small businesses still recovering from the effects of the pandemic, this is easier said than done.

To help small businesses qualify for loan forgiveness, Journey Capital created the CEBA Refinancing Program. Read on to learn more about how the program works so you don’t miss out on this time-sensitive opportunity to save your business thousands of dollars.

A Look Back at the CEBA Program

The Canadian government introduced the Canada Emergency Business Account (CEBA) to support small businesses affected by Covid. It provided interest-free loans of up to $60,000 to eligible businesses to help them cover their daily operational expenses. Set to expire on December 31, 2023, the repayment deadline was recently extended to January 18, 2024, to provide SMBs with some much-needed breathing room during the holidays. This builds on the government’s previous one-year extension announced in January 2022, and many believe it will be the last.

Breaking Down CEBA Loan Forgiveness

Loan forgiveness was built into the CEBA program to encourage full repayment by the deadline and to help ease the financial burden on small business owners looking to avoid incurring interest charges. To qualify, businesses must meet the following criteria:

  • Your eligibility for the Canada Emergency Business Account (CEBA) has been validated by the Government of Canada and the Canada Revenue Agency.
  • Your business is in good standing with the financial institution that funded your CEBA loan.
  • Your outstanding balance is repaid in full on or before January 18, 2024.

*If you apply for refinancing with the financial institution that funded your CEBA loan by January 18, 2024, and need extra time to settle it, you’re still eligible for forgiveness if the outstanding principal (minus any potential debt forgiveness) and any applicable interest are fully repaid by March 28, 2024.

The percentage of loan forgiveness is based on your loan amount. Here is a breakdown of those percentages:

If you borrowed $40,000. Repayment of your outstanding balance will result in loan forgiveness of 25%.

Example: If your outstanding balance is $40,000, you only need to repay $30,000, receiving $10,000 in loan forgiveness.

If you borrowed more than $40,000. Repayment of the outstanding balance will result in loan forgiveness of 25% on the first $40,000 plus 50% on the amount above $40,000.

Example: If your outstanding balance is $60,000, repayment will result in loan forgiveness of 33%, or $20,000.

OnDeck Canada’s CEBA Refinancing Program

If you’re worried about the immediate impact on your cash flow, our CEBA Refinancing Program extends your repayment timeline. Rather than paying down your CEBA loan balance as a lump sum, you can make smaller repayments over a longer period of time. This will allow you to preserve your working capital while maximizing savings with loan forgiveness.

We understand that small businesses have unique needs, so we offer three financing options to choose from:

1. Line of Credit: Our Business Line of Credit lets you borrow up to a limit and pay it back over time, with weekly fixed or variable repayments. Funds are deposited directly into your business account.

2. Fixed Term Loan: With a Business Term Loan, you receive the full financing amount up front and repay it with fixed installments (daily or weekly) over a specified term.

3. Flex Funds: Flex Funds Advance is an advance product that gives you the full amount of financing up front and is repaid with variable, daily payments using a small percentage of your daily card sales.

OnDeck Canada’s Cash Back Promotion

For a limited time, we’re also offering a cash back bonus of up to $1,500 to businesses that apply for refinancing early. The amount varies by loan size and funded date. The earlier you apply, the more savings you’ll be eligible for on your CEBA loan*.

Steps to Qualify for Loan Forgiveness

Take full advantage of the CEBA loan forgiveness program. Here’s a guide to help you get started:

1. Check Your Eligibility: First, make sure your business meets the CEBA eligibility criteria. Your business needs to be in good standing with the financial institution that funded your loan.

2. Review Your Outstanding Loan Amount: If you’re not sure where your balance stands, contact your financial institution to determine your outstanding CEBA balance.

3. Understand Forgiveness Criteria: Get familiar with the loan forgiveness criteria based on the amount you received.

4. Explore Repayment Options: Explore your options and choose the one that best suits your business while protecting your short-term cash flow.

5. Crunch the Numbers: Determine how much you need to pay back, how much you’re eligible to save, and if you choose to refinance your CEBA loan don’t forget to factor in any additional lending costs. The goal of our CEBA Refinancing Program is to ensure you have the breathing room you need while still netting savings from loan forgiveness.

6. Meet the Deadline: Complete the repayment process by January 18, 2024, to be eligible for loan forgiveness.

If you don’t pay before January 18, 2024, you’ll have to repay the full amount borrowed plus 5% interest per year, charged monthly. The principal is due in full by December 31, 2026.

How to Apply for Financing

To be eligible for Journey Capital’s CEBA Refinancing Program, your small business should meet the following minimum criteria:

  • Business must be based in Canada.
  • Must have a business bank account with a Canadian financial institution.
  • Must have a business history of at least six months with you as the business owner.
  • Must make a minimum of $100,000 in annual sales.

If you’re interested in our CEBA Refinancing Program, click here to see how much your business qualifies for. Applying is 100% risk-free and will not impact your credit score.

Don’t let Your CEBA Loan Weigh you Down

Let’s work together to find the best solution for you and your business. Act now to explore your eligibility, understand loan forgiveness criteria, and take advantage of our CEBA Refinancing Program before the January 18th deadline. Need more information about our financing options? Get in touch with our Lending Advisors at (855) 704-7458 Monday through Friday from 9 a.m.-6 p.m. ET.

*Our Cash Back Promotion is only available through our Business Term Loan product on a 12+ month term. Once you’ve paid out your CEBA Refinancing Loan in full (without missing any scheduled payments), the cash back will be paid out in the form of a credit to your business bank account within 10 business days.