Urgent Plea to Extend CEBA Loan Repayment Deadline as 250,000 Canadian Businesses Teeter on Brink [Video]

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According to the Canadian Federation of Independent Business, 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 for repayment of the Canada Emergency Business Account.

Currently the deadline is December 31. 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.

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.

“Almost 900,000 CEBA loans were approved across Canada. Many businesses had no choice but to take on this loan due to circumstances beyond their control. This includes businesses in some of the hardest hit industries such as the retail industry and tourism sector. Mandatory business closures and other government health restrictions left businesses with severe income losses and cash flow issues,” says a recent letter sent by more than 250 business associations to Deputy Prime Minister and Finance Minister Chrystia Freeland.

“Despite their best efforts, high interest rates, inflation and increased labour costs are making it difficult for small-and-medium size businesses to keep their heads above water, let alone make any dent in the debt many had to take on to survive pandemic restrictions. A recent analysis of over 15,000 Canadian businesses found that inflation, input costs, and interest/debt costs are the three most acute obstacles faced by business (at 56 per cent, 40 per cent and 38 per cent, respectively), and the smaller the firm, the more constrained they are by debt.” 

The letter says 49 per cent of small businesses are still making below normal revenues; 50 per cent of Canadian foodservice operators are currently operating at a loss or breaking even compared to 12 per cent pre-pandemic; and, 45 per cent of Canada’s tourism businesses are likely or somewhat likely to close within the next three years without government intervention into their mounting debt load.

Many small business owners are also 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.

In this video interview, Karen McKee, President of Warm Buddy, discusses the plight of small business owners today and the challenges they continue to face.

The Video Interview Series by Retail Insider is available on YouTube.

Connect with Mario Toneguzzi, a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and the only Canadian – to learn how you can tell your story, share your message and amplify it to a wide audience. He is Senior News Editor with Retail Insider and owner of Mario Toneguzzi Communications Inc. and can be reached at mdtoneguzzi@gmail.com.

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Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named as a RETHINK Retail Top Retail Expert in 2024.

2 COMMENTS

  1. I work for a small family business. Luckily we do very well and are tight on cash. I am fully aware that many small businesses are not as lucky. I find it difficult to believe that almost 250,000 businesses will fail if the terms of the CEBA are not extended for one or two years. I believe that the repayment of the loan should be extended. However I feel that interest at 5% should begin. This means a maximum of $3,000. per year. If busunesses cannot afford $250. per month, I think that ultimately they will have to close.

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