What Happens If You Don’t Repay Your CEBA Loan Timely?

The Canadian government came up with the Canada Emergency Business Account (CEBA) program to help small businesses stay afloat during the COVID-19 pandemic. Qualified businesses can access a loan of up to $60,000 interest-free, with a portion of the loan eligible for forgiveness if repaid before December 31, 2022. But what happens if you don’t pay back your CEBA loan on time? In this blog post, we’ll explore the consequences of not repaying your CEBA loan timely and other options available to avoid defaulting.

1. Late payment fees and interest:

 Failing to make your CEBA loan repayment on time will result in late payment fees and interest charges. Each missed payment could attract additional interest, making it increasingly difficult to repay what you owe. You should contact your financial institution to ask for an extension or a payment plan if you are finding it hard to make your payments on time.

2. Damaged credit score:

 Defaulting on your CEBA loan can negatively impact your credit score, making it tough to access other loans or credit facilities in the future. If your credit score drops, you may find it difficult to rent an apartment, renew your insurance policy, or even apply for a new job. Making timely repayments on your CEBA loan will help maintain and improve your credit score.

3. Collections:

 If you default on your CEBA loan, the lender may initiate the collections process. This process can be stressful and invasive, involving phone calls, letters, and even legal action. If you don’t respond to collection efforts, your lender may hire a debt collector to retrieve the funds from you. Debt collectors may call you outside of regular business hours, make frequent calls, and threaten you with legal action. To avoid this stress, make sure you meet your repayment obligations on time.

4. Refinancing:

 If you’re struggling with your CEBA loan repayment, refinancing may be a viable option. Refinancing your loan can help you consolidate your debts and reduce your monthly payments. It is best to contact your financial institution to find out if refinancing your CEBA loan is possible.

5. Bankruptcy: 

If all options have failed, you may consider filing for bankruptcy as a last resort. Filing for bankruptcy means that you cannot pay your debts and declares a legal determination that you are insolvent. It is a serious decision to make and not to be taken lightly. Before filing for bankruptcy, seek professional legal advice to understand the impact on your personal and professional life.


In conclusion, failing to repay your CEBA loan timely can have significant and long-lasting consequences. It could damage your credit score, result in late payment fees and interest charges, and affect your ability to apply for credit in the future. However, solutions are available, including refinancing, asking for an extension, or seeking professional assistance. Make sure to stay on top of your loan repayment obligations to avoid collections and potential legal action. If you are struggling with debt, reach out to your financial institution for guidance, and explore the options available to you.

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