Managing Repayment of Canada Emergency Business Account Loans: Challenges and Solutions

2023-09-28 21:35:31

During the pandemic, hundreds of thousands of businesses received loans from the Canada Emergency Business Account allowing them to stay afloat during this period of instability, but in a few months, they will have to repay their loan.

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According to a recent survey, the overwhelming majority of SMEs need another year to repay everything. 87% of SME owners need at least one additional year to repay their Canada Emergency Business Account loan.

Two weeks ago the federal government extended the deadline for repaying loans by three weeks, from December 31 to January 18, 2024.

But according to economic players in the sector, this extension is clearly insufficient. “What does the government think, that in three more weeks things will change? asked Jean-Nicolas Marchand, general director of the Rimouski-Neigette Chamber of Commerce and Industry.

I don’t understand the government’s logic. What is the impact of three extra weeks? This is completely ridiculous!”

According to the Canadian Federation of Canadian Business (CFIB), only 34% of SME owners have the funds needed to repay their loans on time. 30% plan to borrow to be able to repay theirs on time and keep their grant. 30% are unable to borrow to repay their loan.

“60% of the country’s bankruptcies are in Quebec,” protested François Vincent, vice-president of the CFIB in Quebec.

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Now we can still adapt the programs to give them a little time.

We are not asking for the moon, just one year so as not to lose the subsidies!”If the owners repay their loan on time, they will not have to repay the interest. If they exceed the date, interest of 5% will apply.

This is why, among other things, owners want to borrow to repay their loan. But with current interest rates, this is not necessarily a profitable investment.

“This is not the dilemma the government should have given employers.

There is still time, I hope that the government will hear the message from the different parties,” added Mr. Marchand.

In Quebec, nearly 183,000 businesses received a loan from the Canadian Emergency Business Account

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