IMPORTANT REMINDER: Emergency loan repayment for Canadian businesses (CUEC loan)
Companies with a Canadian government CUEC loan of $40,000 or $60,000 have until January 18, 2024 to repay an amount of $30,000 or $40,000 and benefit from a rebate (subsidy) of $10,000 for a $40,000 loan or $20,000 for a $60,000 loan granted by the Canadian government. In view of this rebate, we recommend that you make the scheduled repayment or obtain refinancing from your financial institution.
What to do if you run out of cash?
If your company does not have the necessary liquidity to make the required repayment by January 18, 2024, we recommend that you repay the amount using your company’s authorized line of credit. If the authorized line of credit is insufficient, the company should contact its financial institution as soon as possible to obtain an increase in its line of credit, refinancing through a new term loan or another financing tool from your financial institution, such as an increase in an existing mortgage.
Following the submission to the Government of Canada of a refinancing application in process from the same financial institution that provided the CUEC loan by January 18, 2024, your company will remain eligible for loan forgiveness if the outstanding principal amount is repaid by March 28, 2024. However, this does not prevent the company from applying for financing from another financial institution.
If the loan is not repaid on January 18, 2024…
For companies whose CUEC loan remains outstanding on January 18, 2024, including loans subject to the refinancing extension period (March 28, 2024), the loan will be converted to a 3-year loan bearing interest at 5% per annum from the date of conversion. Monthly repayments will be limited to interest payments, and the principal of $40,000 or $60,000 must be repaid no later than December 31, 2026.
For any additional questions, please refer to the frequently asked questions on the Canadian government website https://ceba-cuec.ca/fr/faq-cuec/.
An article by Marc-André Pilon, CPA auditor and
Gustave Legault-Brousseau, CPA Director – Consulting Services
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