The long-delayed deadline to repay federal pandemic loans finally arrived Thursday, with many scrambling to set up refinancing deals in a bid to buy more time.

Businesses had until Thursday to repay their loans through the Canada Emergency Business Account (CEBA) and receive partial forgiveness.

After that date, the loans will convert to three-year loans with interest of five per cent per year accruing on the debt.

But business owners who set up refinancing agreements with financial institutions have until the end of March to repay their outstanding amounts and have up to one-third of the loan forgiven.

The chief executive of a fintech company says he’s observed small businesses scrambling to meet Thursday’s deadline to repay their federal pandemic loans, and thousands have applied for refinancing options his company offers.

David Gens, founder and CEO of Merchant Growth, told BNN Bloomberg that there was a “crazy exponential scramble” among businesses who were trying to repay loans they took out in 2020 or 2021.

“People really did leave it to the last minute (in) a lot of cases,” Gens said in a television interview Wednesday ahead of the deadline.


Gens said many waited until the eleventh hour because there was hope of another extension. But lobbying efforts to push the date back were ultimately unsuccessful, with Prime Minister Justin Trudeau throwing cold water on the idea on Wednesday.

As a result, some of those holdouts were scrambling up until the final days and hours to meet the deadline, Gens said.

Businesses that don’t meet the deadline will lose out on the forgivable portion of the loan and will start accruing interest until Dec. 31, 2026.

Those that take up the option of refinancing their loans with a financial institution have until March 28 to set up new terms, and still be eligible for the forgivable portion of the loan.

Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), encouraged business owners to pursue the refinancing option on Thursday.

“If you hustle and apply today, you will have until Mar 28 to get the loan in place while protecting the forgivable portion of the loan,” he said in a post on X, formerly Twitter.

“Even if ultimately rejected, you'll still get the extension to Mar 28,” he said adding five per cent interest will be charged starting on Jan. 19. 

Kelly said small business owners should document the process and apply for financing at the lender where the original loan CEBA loan was taken. 

Kelly said in an interview with BNN Bloomberg Thursday that missing the deadline will have significant consequences for businesses.

“By missing today's deadline, by not applying for a loan by today's deadline, they will then be hit with the full $60,000 tomorrow,” he said.

“Their debt goes up by 50 per cent. They go from owing $40,000 to owing $60,000.”

Kelly highlighted that the outlook for small businesses is “rough,” especially for the ones that are now seeing their debts increase as a result of the CEBA deadline.

He said only half of small businesses in the country have returned to pre-pandemic sales levels and all have “seen huge cost increases on every single line of their budget.” 

Merchant Growth is one of the financial institutions offering refinancing, and Gens said he saw applications pile up as the deadline approached.

In the run-up to Thursday, Merchant Growth saw thousands of financing applications arriving each day for loans of $40,000, Gens said, as well as a “fair number” of requests for $30,000 loans.

Most businesses took out CEBA loans either at $40,000 or $60,000, Gens said, so if they repay up to $40,000 now, they can have $20,000 forgiven.

Most businesses took out CEBA loans either at $40,000 or $60,000, Gens said, so if they repay up to $40,000 now, they can have $20,000 forgiven.


Economists at Desjardins looked at the economic impact of the deadline in a report published Thursday, predicting that CEBA loan repayment will weigh on real GDP and employment, though overall economic impact will be minimal.

According to the report, “more than half of businesses in Canada” received loans under the program. Nearly 900,000 Canadian businesses were approved for a CEBA loan and 575,000 of them were granted extensions, totalling about $49.2 billion in funding. 

Smaller businesses made up the biggest share of those that received loans. Accommodations and the food services sector – both hit particularly hard by pandemic shutdowns – also made up a big chunk of the loan recipients, the report said.

The economists noted that as CEBA loans supported businesses during the pandemic, real gross domestic product (GDP) and employment were higher than they would have been. 

Going forward, the report’s authors predicated that CEBA loan repayment will weigh on real GDP and employment. 

“We’ve estimated that compared to a scenario where CEBA loans were forgiven in their entirety, the level of employment will be nearly 85,000 lower at the end of 2026,” the report said.

“However, inflation and interest rates will be lower as well, providing relative affordability relief to all Canadians.”

The Desjardins economists said they expect the economic impact of CEBA loan repayments will be “minimal” over the near term, as “much of the downside risk” to the federal government’s budget balance has been pushed out to the end of 2026. 

The report also highlighted the possibility of the federal government extending the repayment deadline in a few years to reduce the impact on debt and deficits at the federal level.