Small businesses all over Canada are raising concerns over the potential need to refinance their Canada Emergency Business Account (CEBA) loans at higher interest rates if the ultimatum for the forgivable portion of the loans is not extended. The CEBA program was initiated during the pandemic and offered interest-free, federal government-backed loans to support small businesses affected by public health measures. Businesses could apply for up to $60,000, with $20,000 being written off if the remaining balance was repaid by a designated deadline.
The government recently extended the deadline from December to January 18, 2024. Despite the extension, many businesses feel that the extension is insufficient and are demanding delay by a full year. Some small business owners have shown dissatisfaction with the government’s decision not to grant a longer extension, which equates the government’s position to that of a “loan shark”.
According to a recent survey, 16% of Canadian Federation of Independent Business (CFIB) member businesses revealed that they would be seeking an additional loan from their financial institution to meet the forgiveness ultimatum while 9% are contemplating using home equity to help pay off their CEBA loans. CFIB’s CEO, Dan Kelly, slams the government’s approach by saying it is pressuring businesses to take on more debt.
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