What happens if you can’t repay your CEBA loan?

TL;DR: CEBA default can lead to a repayment demand and assignment of your loan to the CEBA Program for collection, with help from the Canada Revenue Agency. It can happen before December 31, 2026 if you miss required payments or other loan terms aren’t met. Start by confirming your account’s status. A CRA payment arrangement may be possible after assignment, depending on your circumstances.

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A repayment deadline feels different when you’re not sure how you’ll meet it. If that’s where you are with CEBA, start by getting clear on your account and who is managing it.

You don’t need to have the whole solution worked out before making that call. Knowing your balance, loan status and current payment requirements gives you something concrete to work from.

Here’s what CEBA default can mean, and how to take the next step for your business.

What puts a CEBA loan into default?

Default means the borrower hasn’t met the loan’s requirements. The official loan assignment FAQ lists reasons including unpaid principal or interest, insolvency, and failure to follow other loan terms.

December 31, 2026 is the principal maturity date for eligible remaining loans in good standing. An account can enter default earlier if required interest payments are missed, for example. Loans deemed ineligible also had an earlier repayment deadline.

If you’ve received a letter and aren’t sure what it means, ask your financial institution whether it is a reminder, a repayment demand or notice of another change. Confirm what is due and when. You shouldn’t have to guess.

What happens after CEBA default?

Your financial institution asks for repayment

The financial institution that administers your CEBA loan will initially seek repayment of the outstanding amount. Before assignment, it sends a demand letter explaining that the loan is in default and may be assigned to the CEBA Program for collection, if it remains unpaid.

Read the instructions and contact the institution promptly. Ask them to confirm the balance, payment deadline and current status. Keep a record of the conversation and any written confirmation you receive.

The loan may be assigned to the CEBA Program

Assignment means the loan moves from your financial institution to the CEBA Program for collection. If that happens, you receive a written Loan Assignment Notice with instructions for managing the account and making payments.

The notice includes a CEBA Identification Number for registering in the official CEBA Portal. There, you can view your balance, statements and transactions. Follow the new payment instructions after assignment; the account is no longer managed through your original financial institution.

The CRA may help collect the balance

The Canada Revenue Agency may assist with collection of assigned CEBA loans. They may contact you about repayment and consider whether a payment arrangement is appropriate. The CEBA Program overview also explains that unpaid balances may be recovered from tax refunds and federal benefits.

The timing and next steps depend on your account. Use the notices you receive to understand what applies to you.

Can you set up a payment arrangement?

After assignment, the CRA may review your circumstances and work with you on a repayment schedule based on your ability to pay. You can contact the CRA CEBA Contact Centre directly at 1-800-361-2808 to discuss the options. You don’t need to wait for them to call you.

An arrangement isn’t automatic and still requires repayment of the amounts owing. Interest continues at 5% annually until the loan is fully repaid. Ask how the schedule handles ongoing interest and whether a final balloon payment or residual balance will remain. The official payment arrangements FAQ explains these details.

Before the call, gather your recent statements and a realistic view of your business’s cash flow. Think about what you can pay now and what you could pay regularly. Use current receipts and expenses, including payroll, suppliers and other debt payments.

If you already have an arrangement but a payment no longer looks manageable, contact the CRA to discuss it. Getting in touch early gives you an opportunity to explain what has changed.

Who should you contact?

• Your loan is still with your financial institution: Start with the bank or credit union that administers it. Ask about your balance, status and repayment requirements.
• Your loan has been assigned and you need account information: Follow your Loan Assignment Notice and check the CEBA Portal. The CEBA Call Centre at 1-888-324-4201 handles program and account enquiries.
• Your assigned loan needs a payment arrangement: Contact the CRA CEBA Contact Centre at 1-800-361-2808.

The organization holding the loan and the one discussing payment arrangements may have different roles. Having your latest notice in front of you can make the conversation easier.

Could refinancing be part of the plan?

If your business can support regular payments, a new financing may provide a way to settle your outstanding CEBA balance and spread repayment over a new term. That can leave more cash available for everyday operations.

The proposed payments still need to fit alongside your existing commitments. Our CEBA loan refinance guide explains what to consider. You can also explore Journey Capital’s Business Term Loan and discuss your situation with a lending advisor. Funding is subject to lender approval.

If the difficulty goes beyond your CEBA balance, your accountant can help you review the broader financial position.

Start here: Confirm where your account stands is progress, even if you’re still working through the rest.

Information current as of October 26, 2026, based on published CEBA Program guidance. This article provides general information. Contact your financial institution or the CEBA Program for your loan’s status and instructions, and seek qualified advice about legal liability or insolvency.