Most businesses surveyed on track to repay CEBA loans, chamber says

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With just over a month to go until Canada Emergency Business Account repayments are due, one of the country’s largest business groups says most merchants it surveyed are on track to pay back their pandemic loans by the January forgiveness deadline.

The Canadian Chamber of Commerce said Wednesday that nearly half of the 16,000 small businesses it heard from in its fourth-quarter survey on business conditions had received a CEBA loan.

The chamber said more than 30 per cent of businesses that took out loans reported they have already paid them back in full. Two out of three merchants with outstanding balances plan to pay them off by Jan. 18, 2024 – the federal government’s deadline for forgiving a portion of the loans.

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“This means that altogether, approximately 76 (per cent) of CEBA loans are likely to be repaid, with variation across sectors,” the Ottawa-based organization, which represents more than 200,000 businesses across the country, said in a news release.

The chamber said the survey offers a different narrative than the one expounded by organizations such as the Canadian Federation of Independent Business, which says two-thirds of small businesses do not have the money to repay their CEBA loan and half of those have no capacity to borrow in order to secure the forgivable portion.

“The truth is that CEBA loan repayments may not be the full-blown crisis it’s been presented by many to be,” the chamber said.

“This has been a contentious issue for the government, national associations, and local chambers of commerce across the country,” Matthew Holmes, senior vice-president of policy and government relations for the chamber, said in a statement. 

“But the data are now giving us a more concrete story, highlighting that the government took a balanced and fiscally responsible approach, while remaining responsive to the concerns of community-level businesses coming out of the pandemic.

“When 76 (per cent) of all borrowers have met or plan to meet the repayment terms, it’s hard to say this program hasn’t served its intended purpose.”

Nearly 900,000 organizations applied for and received a CEBA loan during the COVID-19 pandemic. The federal program offered up to $60,000 in interest-free loans to help businesses and non-profits survive related shutdowns and slowdowns.

A total of $49.2 billion was disbursed through the program.

Up to one-third of the loans can be forgiven if businesses pay back the outstanding amount by Jan. 18, 2024. 

Those businesses that miss that deadline would lose out on the forgivable portion and see their debts converted to a three-year loan with interest of five per cent annually.

Businesses were offered the chance to refinance their loans with a financial institution instead. Those that did were given until March 28, 2024, to get that in order and still be eligible for the forgivable portion of the loan.

Business groups have been calling for more time to pay back the loans, pointing to ongoing challenges facing small businesses after the pandemic. 

CFIB, for example, has been calling on the government to extend the forgivable deadline from Jan. 18, 2024, to Dec. 31, 2024.

The Canadian Chamber of Commerce said it prefers a different approach. 

Rather than calling for a “blanket extension,” the organization wants the federal government to “consider very targeted interventions” aimed at assisting businesses in vulnerable sectors such as hospitality and tourism.

“We’re not discounting that some businesses continue to face hardship, while struggling to return to pre-pandemic levels,” Holmes said. 

“There are numerous ways to support these Main Street businesses so that our communities continue to have strong, local employers and service providers. But the data is not telling us that this program needs to be extended indefinitely – for the majority of businesses, it appears to have been the support they needed from government, when they needed it the most.”

– With files from the Canadian Press

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