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Greater Moncton Chamber of Commerce unimpressed with CEBA loan repayment extension

Businesses who took advantage of the Canada Emergency Business Account loans, known as CEBA, during the COVID-19 pandemic now have an extra 18 days to pay the money back.

The federal government extended the repayment deadline from December 31 to January 18.

However, the Chamber of Commerce for Greater Moncton says an extra two-and-a-half weeks to pay isn’t good enough.

“We’ve been part of a survey conducted by the Atlantic Chamber of Commerce, which reached out and had about 250 responses,” said CEO John Wishart.

“About 20 per cent of those businesses said we can’t pay it by December 31 of this year and another 40 per cent were unsure, so giving another 18 days is really a bit of an insult.”

Currently, businesses have three options.

First, they can pay back the entire amount by the new deadline of January 18. Second, they can make arrangements with a financial institution to pay it off by the end of March. Finally, if a business can’t pay, their loan will turn into a regular loan with interest and they won’t receive any loan forgiveness from the government.

“The reason this is important is a lot of small businesses are fighting high interest costs, they’re fighting inflationary pressures, which puts their supply chain costs higher, so this is not the time for the federal government to adhere to an essentially artificial deadline on the loan repayment,” said Wishart.

He says that best case scenario, businesses will be able to renegotiate terms and have the entire amount paid off by March 28.

“If you do beyond that, if you haven’t renegotiated the terms with the financial intuition in which you got the CEBA loan, you’re converting it to an up to three year term loan with five per cent interest. So you’re paying extra money that wasn’t on the table previously,” he said.

The Chamber of Commerce for Greater Moncton, along side the chamber in Fredericton and Saint John, asked the finance minister for a full year extension, giving businesses until Dec. 31, 2024 to repay.

“It’s interesting that the federal government announced the CEBA loan extension, the 18 day extension, at the same time that they announced something that was a really good public policy move and that’s the removal of the GST in multi-unit residential construction,” said Wishart.

“We’ve been lobbying for that too and so they heard us on that issue, they seem to be a little bit tone deaf on the CEBA loan issue.”

Across Atlantic Canada, he says 40,000 businesses took advantage of the CEBA loan.

“There’s no doubt that some businesses can make the deadline. They could probably make the December 31 deadline and now they’ll make the January 18 deadline,” he said.

“The people that may not speak as loudly are those that are really struggling and can’t meet those deadlines and will be forced into converting that loan into a traditional loan with interest. Those are the people I think we’re speaking on behalf of.”

Right now, the chamber is urging the federal government to reconsider and apply a longer extension to the repayment deadline.

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