Small business owners across the US are facing unprecedented challenges created by the pandemic. To ensure that businesses stay afloat, various support programs have been announced by the government and financial institutions. One such program is the TD Canada Trust’s Canada Emergency Business Account (CEBA) which offers financial support to eligible small businesses and not-for-profit organizations. In this blog post, we will explore all aspects of TD CEBA loan repayment and refinancing.
1. TD CEBA Loan Overview
TD CEBA loan is a $60,000 interest-free loan offered to small businesses and not-for-profit organizations. The loan is designed to provide support to such entities facing financial challenges due to the pandemic. It can be used for various purposes, including paying rent, utilities, and salaries. The program has specific eligibility criteria, and businesses can apply for the loan through TD Canada Trust.
2. TD CEBA Loan Repayment Terms
One of the significant advantages of TD CEBA loans is that they come with a generous repayment structure. To start, businesses are not required to make any payment for the first year. After that, the loan will be converted into a three-year term loan, which means that it must be paid back within three years.
The loan repayment begins after the deferral period ends, and the loan amount is paid back in six equal monthly installments. The loan can also be repaid early with no penalty. The details of repayment terms are available on the TD Canada Trust website.
3. Refinancing of TD CEBA Loan
Small businesses and not-for-profit organizations that have taken TD CEBA loan can apply for refinancing. Refinancing means that the loan repayment term can be extended, and the interest rate can be reduced, providing much-needed relief to businesses struggling to make ends meet.
To apply for refinancing, eligible businesses can contact TD Canada Trust or visit the TD website. It is essential to know that refinancing will not increase the loan amount; instead, it will modify the repayment terms.
4. Impact of TD CEBA Loan on Credit Score
TD CEBA loan, like other credit lines, can have an impact on your credit score. When a loan application is made, it can result in a hard credit inquiry that can temporarily reduce your credit score. However, once the loan is approved and payments are made on time, it can have a positive impact on your credit score.
It is crucial for businesses to make their payments on time to avoid any adverse impact on their credit score. Not making payments on time or defaulting on the loan can have long-term negative consequences for businesses.
5. Tips for TD CEBA Loan Repayment
Here are some tips that businesses can follow to ensure timely TD CEBA loan repayment:
– Create a budget: Businesses can create a budget to determine an affordable repayment amount.
– Use automatic payment: Businesses can use automatic payment options offered by TD Canada Trust to avoid missing payments.
– Apply for refinancing: Businesses struggling to make payments can apply for refinancing to modify the repayment terms.
– Keep a record of payments: It is essential to keep a record of TD CEBA loan payments for future reference.
TD CEBA loan is a crucial financial support program for small businesses and not-for-profit organizations impacted by the pandemic. Understanding TD CEBA loan repayment and refinancing can help businesses make informed decisions and manage their finances better. Remember to keep track of payments, follow repayment guidelines, and apply for refinancing if required to stay on top of TD CEBA loan repayment.