Fri. Feb 23rd, 2024

Refund CEBA Loans: “I can’t believe I’m going to have to close” /></p>
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<p class=Entrepreneurs have until January 18 to repay the loan granted by the Canadian Emergency Business Account. (Archive photo)


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Tens of thousands of entrepreneurs fear they will not be able to repay a loan of several thousand dollars taken out from the federal government during the pandemic and whose maturity is fast approaching.

Created during the COVID-19 pandemic, the Canadian Emergency Business Account (CEBA) offered loans of $40,000 to $60,000 to nearly 900,000 businesses nationwide.

They must now repay this debt by January 18 in order to benefit from a grant of $10,000 to $20,000. Otherwise, they will have to repay the full loan amount within three years, with an interest rate of 5%.

Catherine Audet, owner of the local product store La Mistinguette, in Montreal, fears that it will not be able to repay its loan taken out thanks to this emergency assistance.

She must repay $30,000 by the deadline in order to keep the subsidized amount of $10,000. The entrepreneur could also benefit from a reprieve until next spring by borrowing this amount from the bank. Otherwise, it's more like $40,000, plus interest, that she will owe Ottawa.

I've had the store for 11 years. I can't believe I'm going to have to close just because of the $30,000 I owe the government.

A quote from Catherine Audet, owner of the boutique La Mistinguette

However, the uncertain economic context is weighing down its turnover. At the end of each month, I have no profits, she confides. There is also the economic crisis… People may have less money to spend.

A few meters further on, on Wellington Street, designer Marilyne Baril, owner of the women's clothing boutique Marigold, is liquidating her merchandise in order to repay her debt to the government.

We don't have that many choices available to us […]. We need to refinance this loan with the banks. And then, everyone knows, interest rates are increasing, it’s crazy, she laments.

Groups representing entrepreneurs are calling on the government to extend the deadline by a year, including the Canadian Federation of Independent Business (CFIB).

Across the country, more than 200,000 SMEs are at risk of closure due to their high level of debt. And that's why the government must quickly announce the extension of the reimbursement deadline.

A quote from Jasmin Guénette, vice-president of national affairs at the CFIB

Same story from Karl Blackburn, CEO of the Conseil du patronat du Québec. With interest rates rising, with increases in production costs, it is clear that they are not at the same level they were at before the COVID-19 pandemic, he says.

On the side of the federal government, spokesperson Katherine Cuplinskasa argues that the Ministry of Finance has already pushed back the deadline from the end of 2022 to early 2024. This additional flexibility is important support for small businesses that may still be struggling to make ends meet, she added.

Based on a report by Elyse Allard

By admin

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