Thousands of business owners across the country have signed a petition by the Canadian Federation of Independent Business (CFIB), calling for an extension to the current Canada Emergency Business Account (CEBA) repayment deadline.
The current deadline is December 31 and if the CEBA loan is not repaid by then, small business owners will lose the up to $20,000 forgivable portion and pay the entire amount at a five per cent interest rate.
While the issue has gained much media attention in recent months, one aspect of the situation is relatively unknown.
Many small business owners are now discovering that in the fine print of the loan many of them unknowingly provided a personal guarantee on the loan, meaning even if the business closes its doors the owner is responsible personally for the debt.
That’s raising fears that this could lead not only to more business closures in the country but also to more personal bankruptcies.
Recently, a joint letter was sent to Deputy Prime Minister Chrystia Freeland calling for more time to repay CEBA loans while keeping the forgivable portion. More than 250 business associations from coast to coast and across all sectors signed on. CFIB’s research shows that one-fifth of all businesses in Canada—nearly 250,000 small businesses—could be at risk of closing their doors next year unless the federal government changes the deadline.
CFIB is pushing the federal government to extend the repayment deadline for the CEBA loan to the end of December 2025 or at least 2024.
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