Jun 15, 2023
Small businesses unable to pay back CEBA loans on time
Nearly 250,000 small businesses – 19% of all small businesses in Canada – could be at risk of closing their doors after 2023 unless the federal government changes the deadline to repay the Canada Emergency Business Account (CEBA) loan, says the Canadian Federation of Independent Business (CFIB). If the deadline isn't extended, small businesses will lose the forgivable portion as of December 31, which will add up to $20,000 more to their debt and cause them to face 5% interest on the full balance. “With only half of small businesses back to normal sales, most businesses – particularly in the arts, recreation, hospitality, and the service sectors – will need extra runway,” says Dan Kelly, CFIB president. "Financial institutions still have time to delay repayment processes if the government extends the CEBA deadline, but that window is closing. Ottawa needs to act now." Research from CFIB shows that of the nine in 10 small businesses who used CEBA, three quarters accessed loans between $40,001 and $60,000, while one quarter received loans of up to $40,000. Only 10% of CEBA users have repaid their loans and a 43% of CEBA users risk missing the current repayment deadline by end of 2023. Even among the 47% of small business owners who indicate they will meet the 2023 deadline, half say they will struggle to do so, and two thirds would like to see an extension of the repayment deadline.
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