The Canadian Federation of Independent Business says 78 per cent of small business owners need extra time to repay their Canada Emergency Business Account loan which would increase their chances of survival.
The CFIB reported on Wednesday that only 10 per cent of businesses that took on a CEBA loan have been able to repay it entirely, while another 47 per cent say they will be able to repay it by the end of 2023. If the CEBA loan is not repaid by December 31, small business owners will lose the up to $20,000 forgivable portion and start accruing interest.
“Many small businesses are trying to repay their COVID-related debt, while facing an onslaught of additional challenges. High interest rates, inflation and labour costs are all making it hard for small businesses to keep their head above water, let alone make any dent in the debt they were forced to take on to survive pandemic restrictions,” said Dan Kelly, CFIB president. “If the government helped ease their debt burden, small businesses could reinvest the money into employees or back in their business. Otherwise, we may see more business failures as businesses realize they can’t afford to stay open.”
CFIB said its research shows that 49 per cent of small businesses are still making below normal revenues, with those in hospitality, arts and recreation, retail and social services hit the hardest.
The national organization said 72 per centof small businesses need to see CEBA repayment rules extended, with 30 per cent preferring a deferral of one year and 42 per cent preferring two years.
The national organization has collected over 19,000 petitions from small business owners calling for improvements to pandemic supports, including the need to extend CEBA loans. It has sent a letter to Deputy Prime Minister Chrystia Freeland and is also sending letters to federal MPs, urging the government to ensure small businesses get the debt relief they need. CFIB is calling on the federal government to:
- Extend the repayment deadline for the CEBA loan to end of December 2025 or at least end of 2024
- Consider additional debt forgiveness
- Implement an appeal process for CEBA loan recipients that are now deemed ineligible
“It’s not too late for Ottawa to show support to small businesses across the country,” said Corinne Pohlmann, Senior Vice-President of National Affairs at CFIB. “Given the uncertain economic situation and high debt loads, requiring repayment by end of this year may force many businesses to throw in the towel.”
Business owners can sign CFIB’s petition to government to extend the CEBA repayment deadline here.
(Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of 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 works as well as a freelance writer for several national publications and as a consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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