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With the Canada Emergency Business Account (CEBA) program ending on January 18, 2024, many Canadian small businesses and not-for-profits are looking for other sources of funding to help them survive the pandemic.

CEBA was launched in April 2020 to provide interest-free, partially forgivable loans of up to $60,000 to eligible businesses and organizations that experienced a drop in revenue due to COVID-19. The program was extended several times, with the last application deadline being June 30, 20211.

To qualify for partial loan forgiveness of up to 33 per cent, CEBA borrowers must repay their loans by January 18, 2024. Otherwise, the loans will convert to three-year term loans with five per cent interest per year, and the repayment date will be extended to December 31, 20261.

However, many CEBA recipients are struggling to repay their loans, as the pandemic continues to affect their operations and cash flow. According to a survey by the Canadian Federation of Independent Business (CFIB), 40 per cent of CEBA borrowers are not confident they will be able to repay their loans by the deadline2.

As a result, some businesses and organizations are turning to independent lenders, such as online platforms, credit unions, and private mortgage lenders, for alternative financing options. These lenders may offer more flexible terms, lower interest rates, or faster approval than traditional banks345.

However, independent lenders also come with some risks, such as higher fees, hidden charges, or predatory practices. Borrowers should do their research and compare different lenders before applying for a loan. They should also seek professional advice and review their contracts carefully before signing345.

The federal government has announced that it is working on a new program to support small businesses and not-for-profits after CEBA ends. The details of the program are expected to be released in the coming weeks1.