The CEBA loan has been a lifeline for many small to medium sized businesses, offering up to $60,000 to help support them in tough times. But now comes a key moment – paying it back. By December 31, 2023, you owe $40,000. If you pay on time, you won’t have to pay the last $20,000. Miss that, and you need to repay the entire $60,000 plus interest by the end of 2025.

Let’s consider a strategy where you don’t lose that $20,000 forgivable loan and that would help better manage your cash flow.

What if we got a bank loan or line of credit to cover what's left of your CEBA bill before December 31, 2023? You pay the $40,000, and avoid triggering the additional $20,000 repayment. You then repay the bank loan over two years, not rushed like the CEBA deadline.

Putting some numbers down: Say you find a line of credit with 15% interest to pay the $40,000 CEBA loan, which is not unrealistic in our high-interest rate times. Two years later, you've paid $12,000 in interest. So, in total, it's $52,000, including what you borrowed and interest.

But if you trigger the $20,000 CEBA "penalty," you’ll have paid 5% interest every year on a $60,000 balance plus having to repay the full loan amount by December 31, 2025. That's a total of $66,000 over two years.

This solution saves your business $14,000 over two years. Remember, this is a simple example and doesn't cover all the details such as actual interest rate, tax deductions, and how you pay back the principal amount. But the basic idea of using another loan for your CEBA payment works out in quite a few situations.
Long story short: You've got choices – miss the deadline and manage the larger payments or use another loan to keep cash flow steady and repay a smaller total balance. It all comes down to your business and what suits you best.

Want more tips on handling your CEBA loan and business cash flow? Let's chat and find what works best for you! 🚀