While no formal details have been released on extensions past the December 31, 2020 application deadline, a few items have been noted over the past month:
As of October 26, 2020, eligible Canadian businesses currently operating through a personal bank account will be able to apply for CEBA.
The Enquiries call back time is now 3 days.
RBC has updated its loan agreement, stating that the $40,000 CAD line of credit funded by the Government of Canada, which will cease revolving on March 31, 2021. On April 1, 2021, the outstanding balance of the Account as at March 31, 2021 will automatically convert to a non-revolving term loan ("Non-Revolving Term Loan"). Note from VTN: This conversion was previously set at December 31, 2020, presumably, to match with the end of the period for which non-deferable eligible expenses could be incurred. It is noted that the debt forgiveness component is calculated based on the highest balance up to March 31, 2021. It is uncertain as to whether this means, or is foreshadowing that the payment for non-deferrable expenses has, or will be, extended to this date.
Uncertainties
Note that many questions and elements are still very uncertain. While the program was likely intended to be rolled out in the same form by each financial institution, there are certainly differences in the loan agreements. It is also noted that loan agreements within the same institutions have also changed over time. Unfortunately, there is no legislation governing this program so the primary source that borrowers must look to for answers is the particular agreement that they signed.
Some areas of questions and differences between agreements:
How is the 25% forgivable portion calculated? (highest balance, the portion used for non-deferrable expenses etc.)
What can the loan be spent on, and what happens if there is non-compliance?
When is the earliest that the loan can be paid back and still make the business eligible for the 25% forgiveness?
What types of arrangements constitute “forgivable loans” that require income inclusion in the year of receipt pursuant to Paragraph 12(1)(x) of the Income Tax Act?
For an article released in respect of earlier versions of loan agreements, but that still gives an overview of the issues, see: “How and when to spend your $40,000 CEBA loan”