CFIB urges government to give small businesses more time to repay CEBA loans
By Canadian PizzaNews Business and Operations Finance
Canadian Federation of Independent Businesses is pushing the federal government to give small businesses a break by extending the repayment deadline for the CEBA loan to the end of December 2025 or at least 2024, considering additional debt forgiveness and setting up an appeal process for CEBA loan recipients that are now deemed ineligible.
Nearly 250,000 small businesses — almost 20 per cent of 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, warns the Canadian Federation of Independent Business (CFIB).
If the deadline isn’t extended, small businesses will lose the forgivable portion as of Dec. 31, 2023, which will add up to $20,000 more to their debt and cause them to face five per cent interest on the full balance.
A new report released today by CFIB entitled “Back in Business? Spring Update on Small Business and CEBA” includes the following results:
- 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.
- The smallest businesses with 0-4 employees are the most likely to miss the repayment deadline (49%)
- 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.
“The message from small businesses is loud and clear: they need more time to repay their CEBA loan. 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,” said 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.”
CFIB is pushing the federal government to provide some relief to small businesses by:
- extending the repayment deadline for the CEBA loan to the end of December 2025 or at least 2024
- considering additional debt forgiveness
- implementing an appeal process for CEBA loan recipients that are now deemed ineligible
Business owners can sign CFIB’s petition to government to extend the CEBA repayment deadline.
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