Some businesses will have to repay CEBA loans sooner, according to CFIB
What was once a lifeline for many business, has now become a burden. According to the Canadian Federation of Independent Businesses (CFIB), some businesses are being told that they were not eligible for the Canada Emergency Business Account (CEBA) loans they received.
“Recently our members are reaching out to us saying they were just told a few days ago that they’re ineligible, so it’s putting many small businesses in a very difficult situation,” explained Duncan Robertson, CFIB’s policy analyst in Nova Scotia.
In order to help with impacts of the COVID-19 lockdown, $60,000 were loaned to many businesses.
For the eligible businesses that took the loan, they have until Jan. 18, 2024 to repay $40,000, and receive a loan forgiveness of $20,000.
However, for the businesses that are ineligible, owners will have until Dec. 31 to repay the entire $60,000.
“It’s really untenable for small businesses. If you’ve taken a CEBA loan in good faith you should be eligible period,” said Robertson.
Robertson said the reasons vary on why a business could be considered ineligible for CEBA. Some of which can be because of clerical errors or simply missing emails from the bank.
“They don’t have a financial department. They don’t have an accounting department. They’re lucky if they have an accountant at all. When COVID hit, it was incredibly chaotic. Businesses took it when they could and now they’re just finding out with only a few days left.”
CFIB is urging the Federal government to pause the CEBA loan repayment to address the small businesses that were considered ineligible to a review process before the repayment date.
Over the last year, CFIB has been asking the government for another year-long extension for all CEBA loan repayments.
“If small businesses don’t get that year extension that we’ve been asking for that forgivable portion, around half of our businesses are going to have to have some difficult conversations and some might have to close their doors. Others will have to lay off staff or change investments,” said Robertson.
CFIB has 97,000 members across Canada, 10,000 of which are from Atlantic Canada.
Restaurant owner Brendan Doherty is among some of the businesses struggling to save enough money to repay the CEBA loan he received during the pandemic. “The prices of everything have gone up. Food costs [and] labour costs are up. Just everything across the board and heading into what is traditionally a slow time of year.”
Doherty will have to take on additional loans to pay it all back. “We’ll have to go find financing elsewhere. Whether it be through the major banks at a much higher interest rate. Anywhere from five to eight per cent on $60,000 is quite a bit of money.”
He will have to repay the loan in January, but that brings a lot of concern. “It’s a worrying time heading to the winter of ’24. The pandemic was tough and now we have new challenges that are just as tough.”
For more Nova Scotia news visit our dedicated provincial page.
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