TORONTO, October 17, 2022 /CNW/ – The Canadian Federation of Independent Business (CFIB) is urging the federal government to ensure small businesses have received the Canada Emergency Business Account (CEBA) loans in good faith but are now deemed ineligible to keep $10-20,000 Forgivable portion of loan than other applicants.
“The CEBA program has been incredibly helpful to over 900,000 small businesses because it was interest-free $40–$60,000 Loans to help them through the pandemic. That was one of the most important features $10–$20,000 The loan would be forgiven by the government after the balance was repaid, allowing the company to repay some of the debt many have been forced to incur to survive lockdowns and restrictions,” said Corinne Pohlmann, Senior Vice President for National Affairs and CFIB. “Unfortunately, thousands of small businesses are now being contacted by their financial institutions demanding that they pay back their CEBA loan in full by the end of 2023 because they are now ineligible at all.”
“It is deeply unfair to force small businesses that received a government-backed loan in good faith to lose one of their key benefits,” he said Dan Kelly, CFIB President. “While companies have had some time to provide more information to qualify, it seems the government has forgotten that during lockdowns and restrictions, many were struggling to survive their businesses every day. Companies that applied for and received funds are having to pay back the full amount amid the massive debt burden many have accumulated due to the pandemic, pushing some over the edge.
Barring cases of blatant fraud, CFIB is asking the government to allow any company that has received a CEBA loan to keep the recoverable portion after the balance is repaid. The government must at least ensure there is a new process for companies to re-qualify and address extreme hardship.
Since the end of COVID, small businesses have been struggling with high input costs, inflation, labor shortages and supply chain challenges. The latest data from the CFIB Small Business Recovery Dashboard shows that 58% of small businesses are still making less than their normal earnings and 64% have pandemic debt on average $144,000.
During the pandemic, the government made changes to its programs to address the changing nature of the pandemic. Small businesses were pleased that the government had listened to earlier CFIB advice by allowing all CEBA beneficiaries to repay the loan by the end of 2023 instead of the earlier deadline of December 31, 2022. CFIB urges the government to continue this approach by making the following changes:
Ensure all CEBA loanees who received it in good faith but are now deemed ineligible retain the forgivable portion if they repay the loan by the end of 2023
Increase the forfeitable portion of all CEBA loans to at least 50%
Extend the CEBA loan repayment period by another year December 2024
“Implementing these recommendations will help more companies be able to fully repay and repay the balance of their loans,” concluded Kelly.
Business owners can add their voice to CFIBs petition and urge the government to expand and extend CEBA loans to businesses.
The Canadian Federation of Independent Business (CFIB) is canada Largest association of medium-sized companies with 95,000 members from all sectors and regions. The CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.approx
SOURCE Canadian Federation of Independent Business
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